The application and development of goethite process were hindered by the poor filterability of the precipitate and the great loss of nickel in nickel hydrometallurgy. In this study, the effects of pH on the goethite precipitation and the mechanism of the nickel loss were investigated. The goethite precipitation at a lower pH (2.4 to 3.0) guaranteed a higher recovery of nickel at the cost of the filterability of the precipitate. Then a novel process, magnetic seeding and separation, was proposed to improve the filterability of iron residues and simplify the iron removal process. The iron precipitated on the surface of the magnetic seeds to form a large particle with core-shell structures and the magnetic core endowed the particles magnetism. Efficient magnetic separation offseted the poor settleability and filterability of the precipitate. After magnetic separation of iron residue, the nickel solution was qualified and the dried iron residue contained more than 52% Fe and less than 0.6% Ni, indicating a promising alternative process for treatment of bulky residues of iron precipitate. Further analyses with Environmental scanning electron microscopy (ESEM) and X-ray Diffraction (XRD) provided a fundamental understanding of the new process.