Possible improvements in the mechanical properties of surface-coated aluminium have been investigated. Aluminium plasma sprayed with iron powder was processed using two different laser-beam settings (integrated and defocused) with varying processing parameters. Mechanical and microstructural characterizations of the specimens revealed great differences between the two laser-beam settings. The defocused laser beam showed a clear improvement of hardness which was not observed for the integrated laser beam. The integrated laser beam gave deep melt pools with large Al3Fe particles (10-200 mum) in the top layer, and smaller alpha-Al(Fe, Mn)Si particles (0.1-0.3 mum) throughout the melt pool. Small, partly coherent Al3Fe precipitates (0.25 mum long) were found between the large Al3Fe particles. Processing with a defocused laser beam produced a shallower melt pool with a homogeneous distribution of the iron in the form of Al3Fe particles.