Accurate density-functional calculations are performed to investigate the formation of Ti and Fe ultrathin alloys on Al(0 0 1) surface. It is demonstrated that a deposition of Ti monolayer on Al(0 0 1) substrate leads to the formation of Al3Ti surface alloy with Ti atoms arranged according to the L1(2) stacking, distinct from the D0(22) structure characteristic of a bulk Al3Ti compound. A quest for the reason of this distinct atomic arrangement led us to the study of the surface structure of Al3Ti(0 0 1) compound. It is concluded that even the Al3Ti(0 0 1) surface is terminated with three layers assuming a L1(2) Stacking and hence this stacking fault can be classified as a surface-induced stacking fault. Several possibilities of Fe atoms distributed in the surface region of Al(0 0 1) have been examined. The most stable configuration is the one with the compact Fe monolayer on Al(0 0 1) and covered by one Al monolayer. Lastly, our calculations show that there is no barrier for the penetration of Fe adatoms below the Al(0 0 1) surface; however,. such a barrier is present for a Ti-alloyed Al(0 0 1) surface. (c) 2005 Elsevier B.V. All rights reserved.