Tar formation is the main bottleneck for biomass gasification technology. A novel rotary kiln type biomass gasification process was proposed. The concept design was based on air staging and process separation. This concept was demonstrated on a pilot scale rotary kiln reactor under ambient pressure and autothermic conditions. The pilot scale gasifier was divided into three different reaction regions, which were oxidative degradation, partial oxidation and char gasification. A series of tests was conducted to investigate the effect of key parameters. The results indicate that under optimum operating conditions, a fuel gas with high heat value of about 5500 kJ/Nm³ and gas production rate of 2.32 Nm³/kg could be produced. Tar concentration in the fuel gas could be reduced to 108 mg/Nm³ (at the gasifier outlet) and 38 mg/Nm³ (after gas conditioning). The cold gas efficiency and carbon conversion rate reached 75% and 78%, respectively. The performance of this gasification system shows considerable potential for implementation in distributed electricity and heat supply projects.