A method for distilling shale oil from oil shale, which comprises: supplying an oil shale together with a granular heat medium heated to a prescribed temperature in a heating furnace to a distiling furnace, where a gas containing a gaseous shale oil, hydrogen and carbon monoxide is separated by vaporization from said oil shale through heat exchange with said granular heat medium; separating the liquid shale oil from said gas, separating said granular heat medium from the waste oil shale after separation of said gas; and then, feeding back said granular heat medium into said heating furnace to reheat said heat medium again to said prescribed temperature and to use said heat medium in recycle. In said method, said granular heat medium comprises manganese oxides and iron oxides. The heat of said granular heat medium is replenished with the heat produced by exothermic reaction of said hydrogen and said carbon monoxide contained in said gas with Mn.sub.2 O.sub.3 contained in said granular heat medium and reducing by means of said hydrogen and said carbon monoxide contained in said gas, Fe.sub.2 O.sub.3 contained in said granular heat medium into Fe.sub.3 O.sub.4 and Fe to impart magnetism to said granular heat medium; and, magnetically separating said granular heat medium from said waste oil shale.