The use of laterite ore as a major nickel source is gradually increasing because of the depletion of sulphide ores. However, in contrast to high-grade nickel sulphide ore, low-grade nickel laterite ore cannot be as easily upgraded by current technologies due to its complicated mineral structure and nickel distribution. This study investigated the mineralogical characteristics, occurrence state and dissemination characteristics of nickel within Yunnan nickel laterite ore in China. Nickel laterite ore had a complex internal structure and mainly consisted of limonite (10wt.%) and serpentine (87wt.%). Sulphides were not a significant part of this laterite ore and were rarely observed. Furthermore, the nickel was mainly hosted in serpentine by substitution for Mg or by adsorption. Serpentine had a mean grade of approximately 0.77wt.% Ni and represented approximately 81.49wt.% of the total laterite resource. A portion of the laterite ore had a pore structure that was formed by destruction of the original protolith during and after its formation, with a specific surface area of 70.042m2/g. The actual temperature for the reduction of metal oxides within the ore was analysed by H2-TPR (temperature-programmed reduction), which indicated that it was higher than the reduction temperature of the pure metal oxides. Finally, based on the above analyses, a non-melting reduction treatment process was proposed for efficient and reasonable utilization of Yunnan laterite ore. •Mineralogical characteristics of Yunnan laterite ore have been made a detailed investigation.•Thermal properties and reduction characteristic of laterite ore are also studied.•A non-melting reduction treatment process has been designed to utilize Yunnan laterite ore reasonably.