An AlN thin film grown on sapphire substrate was implanted with 45 keV 57Fe and 56Fe ions at several energies to achieve a homogeneous concentration profile of approximately 2.6 at.%. in the AlN film. Conversion electron Mossbauer Spectroscopy data were collected after annealing the sample up to 900 °C. The spectra were fitted with three components, a single line attributed to small Fe clusters, and two quadrupole split doublets attributed to Fe substituting Al in the wurtzite AlN lattice and to Fe located in implantation induced lattice damage. The damage component shows significant decrease on annealing up to 900 °C, accompanied by corresponding increases in the singlet component and the substitutional Fe.