The removal of Fe from Al alloy scraps is the main challenge for their recycling because the excess of Fe usually forms needle-like phases in the Al alloys, which reduces their mechanical properties. In this study, a combined process of electromagnetic directional solidification and Si addition is proposed to remove the Fe impurities from Al alloy scraps. The influence of the Si content on the removal and distribution of Fe impurities and the removal mechanism of Fe impurities were studied during the electromagnetic directional solidification of Al alloy scraps. In addition, the precipitation pattern of various phases and the removal mechanism of Cu, Mn, Mg, and Zn impurities were studied. The obtained results showed that adding 5–11.4 wt% Si during the electromagnetic directional solidification of Al alloy scrap can promote the precipitation of large bulk α-Fe (Al15(Fe, Mn)3Si2) phase at the bottom and top of the alloy. In other words, Fe and Mn were mainly enriched at the bottom and top of the alloy, which caused the removal of Fe and Mn impurities (Fe and Mn were reduced from 1.1 to 0.32 wt% and from 0.73 to 0.15 wt%, respectively). After the bulk α-Fe phase precipitated, the Al, Chinese script-like α-Fe, Si, θ (Al2Cu), and Q (Al3Cu2Mg9Si7) phases would sequentially precipitate. In the electromagnetic directional solidification, the Mg impurities (from 1.2 to 0.65 wt%) and Zn impurities (from 1.7 to 0.03 wt%) were also removed. This study provides a new green process for the efficient Fe removal from Al alloy scraps.