An Fe/FeAl₂O₄ composite was prepared with Fe-Fe₂O₃-Al₂O₃ powder by a hot press sintering method. The mass ratio was 6:1:2, sintering pressure was 30 MPa, and holding time was 120 min. The raw materials for the powder particles were respectively 1 µm (Fe), 0.5 µm (Fe₂O₃), and 1 µm (Al₂O₃) in diameter. The effect of sintering temperature on the microstructure and mechanical properties of Fe/FeAl₂O₄ composite was studied. The results showed that Fe/FeAl₂O₄ composite was formed by in situ reaction at 1300 °C–1500 °C. With the increased sintering temperature, the microstructure and mechanical properties of the Fe/FeAl₂O₄ composite showed a change law that initially became better and then became worse. The best microstructure and optimal mechanical properties were obtained at 1400 °C. At this temperature, the grain size of Fe and FeAl₂O₄ phases in Fe/FeAl₂O₄ composite was uniform, the relative density was 96.7%, and the Vickers hardness and bending strength were 1.88 GPa and 280.0 MPa, respectively. The wettability between Fe and FeAl₂O₄ was enhanced with increased sintering temperature. And then the densification process was accelerated. Finally, the microstructure and mechanical properties of the Fe/FeAl₂O₄ composite were improved.