Iron-base alloys containing 8-11 wt.% Si, 4-8 wt.% Al, known as “Sendust” alloys, show excellent soft magnetic properties. These magnetic properties are strongly dependent on heat treatment conditions, especially on the quenching temperature following annealing. But little has been known about the microstructure and the Fe-Si-Al ternary phase diagram has not been established. In the present investigation, transmission electron microscopy (TEM) has been used to study the microstructure in a Sendust alloy as a function of temperature.An Fe-9.34 wt.% Si-5.34 wt.% Al (approximately Fe3Si0.6Al0.4) alloy was prepared by vacuum induction melting, and homogenized at 1,200°C for 5 hrs. Specimens were heat-treated in a vertical tube furnace in air, and the temperature was controlled to an accuracy of ±2°C. Thin foils for TEM observation were prepared by jet polishing using a mixture of perchloric acid 15% and acetic acid 85% at 10V and ∼13°C. Electron microscopy was performed using a Philips EM 301 microscope.