Chemical-looping hydrogen generation (CLHG) integrates chemical-looping combustion (CLC) and the steam-iron process. It is a process for hydrogen production with inherent CO2 separation. CLHG includes three reactors: a fuel reactor, a steam reactor and an air reactor, with iron oxide as oxygen carrier. This paper presents a compact fluidized fuel reactor for CLHG to produce reductive FeO with CO2 sequestration. An iron ore as oxygen carrier was tested, and CO and syngas were used as fuels. The results showed that through this compact fuel reactor, reductive FeO for further hydrogen generation was obtained and a high concentration CO2 was separated at the outlet of the fuel reactor. The influence of riser temperature, bubble fluidized bed temperature and Fe2O3/CO ratio on the bed performance was investigated. It revealed that the bubble fluidized bed temperature and Fe2O3/CO ratio had a significant impact on the fuel conversion while the effect of riser temperature was marginal. The iron ore exhibited good reactivity and no agglomeration was found in the experiment.