This new, dry process employs fluidization and particle-coating techniques and involves direct conversion of uranium hexafluoride to a solid, (uranyl fluoride), by hydrolysis with steam followed by reduction of the uranyl fluoride to the dioxide by reaction with steam-hydrogen mixtures. Process studies were carried out in 3-in.-diameter Monel reactors. The uranium-hexafluoride/steam reaction was conducted continuously at relatively low temperatures, about 200 C, at a uranium hexafluoride rate equivalent to 174 lb uranium h-1 ft-2 of reactor cross section and a steam rate of about 3.25 times the stoichiometric requirement. Seed addition was required to offset particle-growth effects. Uranium losses to the off-gas were less than 0.01% of the hexafluoride fed. Reduction of the uranyl fluoride to the oxide was demonstrated in batch tests. Low-fluoride (<250 parts/106 residual) material was consistently produced in four hours at 650 C and in seven hours at 600 C using a 50:50 mixture of steam and hydrogen. Pellet-fabrication tests on dioxide powders ground to -325 mesh gave sintered densities of about 94% of theoretical.