The Al-Fe alloy powders were rapidly solidified by gas atomization. Rapidly solidified Al-Fe alloy powders for ranges of composition from 0 to 8wt.%Fe have various microstructure, i.e., cellular, dendritic or two-zone structure. Some small particles(∼10㎛ or less) of Al-Fe alloy at concentrations between 0 and 8wt.%Fe are undercooled significantly prior to solidification and exhibit a two-zone structure in individual powder particles. X-ray diffraction patterns were obtained with Copper K(λ=1.5418Å) in diffractometer to study the extension of the solubility limit of Fe in Al. Lattice parameters were estimated from extrapolation by means of the Nelson-Riley function. The X-ray diffraction patterns for the alloy powders containing up to 4wt.%Fe do not show intensity peak of FeAl₃phase. And the diffraction angles for α Al are shifted up to 4wt.%Fe alloy powders. Thus 4wt.%Fe probably represents the limit of metastable solubility of Fe in Al solidified by gas atomization.