The solid-state transformation of the iron-rich intermetallic phases in Al-Cu 206 cast alloys during the solution heat treatment was studied by using Scanning Electron Microscope (SEM), Electron Back Scattered Diffraction (EBSD), Differential Scanning Calorimeter (DSC), and Transmission Electron Microscope (TEM). At a normal solution treatment temperature of 793 K (520 °C), no visible variation is observed for the β-Fe phase solidified from the Al alloy melt. With increasing soaking time, however, the Chinese script α-Fe becomes unstable and progressively transforms into platelet β-Fe, termed as solid-state-transformed (STed) β-Fe to distinguish it from the β-Fe directly solidified from the Al alloy melt. The STed β-Fe preferentially nucleates on the α-Fe and then grows from the α-Fe/Al interface into α-Fe and/or Al matrix with a much higher growth rate in the α-Fe. The incomplete solid-state transformation from α-Fe into STed β-Fe leads to the fragmentation of the α-Fe. The formation of the STed β-Fe with increasing size and volume fraction after longer soaking time can deteriorate the tensile properties.