The application of interlayers in solid-state diffusion bonding is considered for facilitating improved joint strength as well as optimizing the bonding parameters. In case of dissimilar metals, the interlayers are preferred to promote diffusivity by reducing the metallurgical incompatibility. In the present work, the effect of formation of intermetallics at interfaces of the dissimilar joints between Ti-6Al-4V (Ti64) alloy and interstitial free (IF) steel, produced by direct diffusion bonding as well as by using the interlayers of copper and nickel, was evaluated. The diffusion bonding experiments were performed in a temperature range of 1023 K to 1223 K, under a constant pressure of 10 MPa for 10 minutes, in high vacuum conditions. It was observed that diffusion of interlayer(s) into the base metals increased with bonding temperature, which led to the increase in intermetallic layers at the joint interface. At 1223 K, the influence of interlayer on microstructure of interfaces was reduced by complete diffusion of interlayers and subsequently led to the interdiffusion of base metals. The maximum shear strength of~186 MPa was recorded for the bonding performed using a nickel interlayer at 1023 K. Detailed microstructure analysis, nanoindentation measurements and shear tests suggest that the presence of a thin layer of hard TiFe intermetallic at the interface has no adverse effect, but a soft remnant interlayer can deteriorate the shear properties of the diffusion-bonded joints.