The plate-like Fe-rich intermetallics in recycled Al-Mg-Si alloys dramatically degrade the mechanical properties, which has to be minimized to obtain the high-performance components. Previous finding of using Mn to neutralize the harmful Fe have proven to be effective at a Mn:Fe ratio of 2:1 in order to convert detrimental β-Al5FeSi (β-Fe) plates into less harmful α-Al₁₅(Fe, Mn)₃Si₂ (α-Fe) scripts. However, excess amount of Mn will inevitably introduce large fraction of intermetallic particles which reduce the ductility of alloy. In this study, we propose a new process which utilize both homogenization and hot deformation processes to achieve dissolution and transformation of detrimental Fe-rich intermetallics. The transformation mechanisms with limited Mn addition (Mn:Fe Ratio≈1) have been uncovered. After homogenization for 10 h, the percentage of β-Fe decreases from 1.13% to 0.87%. After 30% hot deformation, it further decreases to 0.45% and the elongation is increased by 55.97%. If we combine the hot deformation 30% with cold deformation by 20%, it will eventually decrease to 0.25%, achieving complete conversion from β-Fe to α-Fe, and the tensile strength is increased by 42.15%. To uncover the transformation mechanisms of Fe-rich intermetallics, 3D distribution of Fe-rich intermetallics and microporosity have been quantified as a function of processing conditions by using X-ray computed tomography (XCT), demonstrating that the new approach can make use of the Fe tolerable recycled Al alloys to achieve high strength and ductility.