Microstructural changes which take place during the tempering of an as-cast Aluminum bronze, of nominal composition Cu-10%Al-3.5%Fe, have been studied by optical and transmission electron microscopy. It was found that the tempering of the as-cast alloy resulted in a progressive transformation of, β-phase into α-phase along with a precipitation of Fe3Al intermetallic compound. Upon quenching the as-cast alloy from the temperature close to the solids line, the, β-phase transformed into martensite which had 3R crystal structure. The martensite plates were twin related. Tempering of the quenched structure resulted in a uniform distribution of intermetallic particles in a matrix of α-phase.