The joining of aluminum and steel has been considered as the efficient combination to develop lightweight and environmental friendly structures. However, due to the significant differences in mechanical and physical properties of aluminum and steel, the joining of these two metals is challenging, where typically several intermetallic phases are formed at the interface. Origin of intermetallic phases at the Al-Fe interface is inevitable due to the low intermixing of Al and Fe. Thus in order to achieve reliable joining, it is necessary to have basic understanding about these intermetallic phases. This paper aims to describe mechanical and bonding properties of the two most commonly observed phases, Fe4Al13 and Fe2Al5. The formation energy, elastic properties and nature of bonding of Fe4Al13 and Fe2Al5 have been calculated. The results show that Fe2Al5 is thermodynamically more stable than Fe4Al13, and it seems to be less brittle than Fe4Al13. Electron localization plots of these compounds show a combination of covalent and metallic bonding, where Fe4Al13 shows a stronger tendency of covalent character than Fe2Al5