The (Fe88Si12)95Al5 alloy was prepared by an aluminothermics. The (Fe88Si12)95Al5 alloy is composed of spheroidic α-Fe(Si,Al) precipitate with size of 20–50 nm and γ-Fe(Si,Al) matrix. The yield strength and fracture strain in compression of the (Fe88Si12)95Al5 alloy are 1500 MPa and 23% respectively. The shear bands propagating in the compressive deformation are arrested by the precipitation particles that resulted in large ductility and high strength simultaneously.