A method of manufacturing reduced iron at high Fe purity efficiently with less intrusion of a slag components using less carbonaceous reducing agent and fuel, comprising charging a compact of the iron oxide containing a carbonaceous reducing agent in a packed bed, reducing the iron oxide to 90% or more while keeping in a solid state by a heat source formed from the lower portion of the furnace and then melting the same, as well as an apparatus for manufacturing the metallic iron, comprising a fire grate disposed in the inside of a packed bed, a compact charged layer on the fire grate, a charging product charging mechanism for supplying the compact and a mechanism for discharging an exhaust gas in the furnace, and a fuel charging mechanism, a fuel combustion space and a molten product stores bath disposed below the fire grate.