Abstract <p>Newly developed (Al, Zn, Mg)–Fe cast alloys have been found to exhibit properties of wrought alloys while displaying the shape casting characteristics of cast alloys and thus have the potential for making near net shape light-weight structural components. The alloy is based on a dilute hypoeutectic Al–Fe system with Zn and Mg as strengtheners and Ti as a grain refiner. The alloy is also precipitation hardenable but the precipitation behavior and the evolution pathway of the precipitates during the manufacturing process are not well known. In this work, systematic studies were carried out to elucidate the evolution pathways for the microstructure and the precipitates in a manufacturing process like friction stir welding (FSW), which is commonly used for aluminum alloys. It also involved microstructure–property correlative studies through ThermoCalc simulation and microstructural characterization to gain insights on different types of metastable Al–Fe-based eutectic phases present in the as-cast alloy and their evolution during FSW affecting the properties. Al_mFe intermetallic phases underwent morphological changes from skeleton type to particulate form and were also partially transformed to Al₆Fe during FSW. The grain size of the alloy was also refined significantly during FSW. The studies on aging behavior revealed the existence of homogeneously distributed Zn-rich nanoclusters and Zn–Mg-based GP zones, which did not evolve into stable equilibrium precipitates, in the stir zone (SZ) during long-term natural aging post-FSW. The heat-affected zone (HAZ), on the other hand, exhibited accelerated growth of <i>η</i>-type precipitates due to localized solute microsegregation and thermally induced dislocations.</p> Graphical Abstract <p></p>