The effects of Fe2O3 addition in MgO-CaO refractory on desulfurization of liquid iron were studied by SEM, EDA and chemical analysis. Fe2O3 of 1 % and 4 % were added to MgO-CaO refractory as the lining of graphite crucible in which 150 g iron powder with sulfur of 0.15 % was charged. It is found that when the sample is heated at 1 600 ℃ for 40 min, 60 min and 90 min, the addition with Fe2O3 of 1 % improves desulfurization greatly. However, the desulfurization ratio of the refractory with Fe2O3 addition of 4 % is less than that with Fe2O3 addition of 1 %. For the soaking time of 90 min, the desulfurization ratio is less than those of 40 min and 60 min. These phenomena were explained by the contrary roles of O2- and Fe2+ formed by reaction between liquid iron and Fe2O3 on desulfurization.