Elemental aluminium and iron powders have been mechanically alloyed in the atomic Al : Fe ratios of 1:1 and 1:3. The structural evolution of the samples was followed by X-ray diffraction and differential calorimetry. Extended milling caused the formation of an almost completely disordered bcc solid solution instead of the equilibrium B2 and DO3 compounds. Upon heating to 700 degrees C the formation of the B2 phase was observed in the equiatomic samples and no significant variation of the long-range state of order in the iron-rich samples. Upon heating of samples pre-milled for short or intermediate times, at about 400 degrees C, the nucleation and growth of Al5Fe2 was observed which, upon further heating to 700 degrees C, transformed to the B2 phase or to the bce solid solution, depending on the sample composition. These results suggest that the solid-state reactions proceed through diffusion of iron atoms in the aluminium layers, and that for an iron concentration in these layers below about 50 at%, the Al(Fe) solid solution could be in a metastable phase.