To enhance the utilization capacity of zinc-containing electric arc furnace dust (EAFD), the reduction melting behavior of EAFD under iron bath conditions was empirically investigated. The sphericity of Fe droplets was defined as the judgment criterion for its coalescence, and then, the relationship between iron droplet diameter and sphericity was determined over time. The behavior of melting and separation of EAFD pellets was also established based on the experiments. The results showed that the Zn removal rate of EAFD pellets under iron bath conditions reached more than 99% at 5.0 min, but the metal-slag separation was not finished at 15.0 min. Due to the compositional fluctuation, several regions of liquid slag were formed in the EAFD pellets, and then, the liquid slag grew until the pellets melted completely. The number of Fe droplets with sphericity >65% and diameter >500 μm decreased with time, and large-diameter Fe droplets were the first to undergo complete separation. The separation process of slag and iron involved the initial formation of Fe droplets via Brownian motion, followed by an increase in the diameter of the iron droplets via the Marangoni effect. The Fe droplets in the slag phase drop rate resembled Stokes Law.