Abstract A metastable Al90Fe10 (at.%) alloy, composed of a supersaturated solid solution of face-centred cubic (fcc) Al(Fe) and an amorphous phase matrix, was prepared by mechanical alloying of a mixture of Al and Fe elemental blends. The thermally induced microstructural evolution in the dual phase alloy was characterized by X-ray diffraction, transmission electron microscopy, differential scanning calorimetry, and magnetothermal analysis. On continuous heating two stages of solid state phase transformation occurred: (i) a polymorphous crystallization of the amorphous phase to a metastable crystalline Al6Fe that structurally stabilizes over a temperature range of about 200 K, and (ii) a eutectoid decomposition of the crystalline Al6Fe into the equilibrium phases of Al13Fe4 and fcc Al(Fe). Thermodynamic and kinetic analyses of the observed phase transformation processes were given. The formation of the dual phase alloy in the as-milled state and the phase transitions can be illustrated by a hypothetical free energy diagram, implying the dual phase structure facilitates the polymorphous crystallization of Al6Fe.