Phosphorus-containing converter slag is a common waste in the iron and steel industry, and has the characteristics of high generation and low secondary-utilization values; however, the high-phosphorus content in converter slag limits its ability to be recycled during the steelmaking process. In this study, the dephosphorization behavior of converter slag by carbothermal reduction was studied through experiments and thermodynamic calculations. The results showed that the gas product of the converter slag produced by carbothermal reduction was mainly P2, and that part of P2 entered the iron phase to generate iron phosphate compounds. With the increase in Fe content, the amount of P2 also increased, which may provide a suitable new direction for the production of ferrophosphorus. Based on the carbothermal reduction theory, a new “circulating steelmaking process of converter steel slag gasification” was proposed and applied to Chengde Iron and Steel Group Co., Ltd. (Chengde, China). The industrial production practice showed that the process did not affect the dephosphorization effect of the next furnace, and that the average iron, steel, and slagging-material consumption per furnace was reduced by 4.74 kg and 608 kg, respectively. CO2 emissions were reduced by 4.86 kg, thus achieving the goals of energy saving, environmental protection, and efficient dephosphorization.