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Summary: Ammonia gas (NH3) is a clean energy, as well as an efficient reduction and nitridation agent. A novel process of reduction and nitridation with NH3 followed by magnetic separation and low‐temperature selective chlorination to deal with vanadium slag has been proposed. Vanadium spinel (V‐Fe spinel, FeV2O4) is the main V‐bearing phase in vanadium slag, and its reduction and nitridation behavior with NH3 were investigated in this study. Thermodynamic analysis indicated that the reaction was feasible. The experimental results demonstrated that NH3 gas was an excellent reagent for reduction and nitridation. DFT calculation proved that NH3 molecule was easier adsorbed on V atom. The phase component of the final product was Fe/Fe4N/VNxOy, whose relative mass fractions obtained by Rietveld refinement analysis were 23.5%, 1%, and 75.5%, respectively. The evolution of iron and vanadium was in the order FeV2O4 → Fe4N/Fe6N2−3 → Fe4N/Fe and FeV2O4 → V2O3 → VNxOy, respectively. VNxOy was a solid solution, whose O content decreased gradually as the temperature and duration time increased, whereas the N content increased correspondingly. The O content can be decreased to less than 0.10 wt.% after reduction and nitridation at 800°C to 850°C for 3 h. [ABSTRACT FROM AUTHOR]