The intermetallic compound NiAl has drawn much attention owing to its physical properties, which can be exploited for high-temperature structural applications. However, the lack of room temperature ductility and poor strength at high temperatures hinder its utilization. The addition of Fe with a convenient thermal treatment generates to form BCC α phase Fe precipitates in the NiAl matrix. The Fe precipitates improve both the high temperature strength (by precipitation strengthening mechanism) and magnetic properties of Ni-Al-Fe alloys. Therefore, the formation of Fe precipitates could be determined from changes in the magnetic properties for Ni-Al-Fe alloys. The influence of annealing on the microstructural evolution and magnetic properties of Ni₅₀Fe_xAl_50-x alloys for x=20, 25, 30 has been investigated.