In a method for producing a reduced iron pellet, when a powder formed article including iron oxide and carbon is heated and reduced in a rotary hearth furnace, a formed article produced using a raw material, in which an average diameter of the iron oxide is 50 microns or less and a ratio of carbon monoxide to carbon dioxide in a reduction zone is from 0.3 to 1, is reduced at a temperature of 1400° C. or less, thereby producing a reduced iron pellet in which a metallization ratio of iron is 50 to 85% and a ratio of residual carbon is 2% or less.