Increased microhardness in rapidly solidified Al-Fe alloys is usually interpreted by means of extended solubility of iron atoms in the aluminum matrix and solid solution hardening. Transmission electron microscopy observations, however, frequently reveal the presence of aggregates of an intermetallic microcrystalline phase in the as-solidified specimens. Depending on the segregation scale of the phase, Jones identified higher microhardness areas (A type) and lower microhardness areas (B type). This paper provides a more detailed description of melt-spun and air-atomized microstructures of Al-8(weight percent)Fe alloys by optical and analytical electron microscopy. Significant increases in A-type microhardness result from decreased size in the phase aggregates. The hardening mechanism is consistent with an Orowan model of dislocation looping around incoherent and nonshearable precipitates. From a grain morphology standpoint, a columnar and an equiaxed zone can be distinguished. The metastable solidification paths leading to their formation are briefly discussed.