First-principles, spin-polarized local-density-functional calculations are used to model interstitial iron ͑Fe i ͒ and its complexes with substitutional aluminum in dilute Si x Ge 1−x alloys ͑x Ͻ 8%͒. We considered both the effect of direct bonding between Fe i or Fe i Al with Ge atoms in the x → 0 limit and the evolution of the defect properties with the alloy composition. It is found that Fe i prefers Si-rich regions, but when placed near a Ge atom, its ͑0 / +͒ level is shifted toward the conduction band. However, the ionization energy of Fe ͑+/+2͒ -Al − is only slightly changed by the presence of neighboring Ge atoms in the proximity. It is also found that indirect alloying effects shift the donor levels of Fe i and FeAl at a fast rate toward the valence band. The acceptor levels, however, remain approximately at the same distance from E v .