A study was conducted to observe the oxidation of NiAl+3.5at.%Fe alloy in β-NiAl phase field at air temperatures of 1000, 1200 and 1400℃, and these results were compared with those of pure NiAl alloys. The primary effects of the Fe-addition in NiAl were found to be: 1) decrease in oxidation resistance and adherence of scales during both isothermal and cyclic oxidation tests, 2) enhancement of phase transformation rate from θ-to α-Al2O3. 3) more rapid formation of characteristically ridged α-Al2O3, scales during initial oxidation stages, and 4) partial scaling of voids formed at the scale-substrate interface and dissolution of Fe inside the alumina scale by the outward diffusion of Fe from the substrate alloy.