The influence of annealing on the microstructural evolution and magnetic properties of Ni(50)Fe(x)Al(50-x) alloys for x=20, 25, and 30 has been investigated. Solidification microstructures of as-cast alloys reveal coarse grains of a single B2 type beta-phase and typical off eutectic microstructure consisting of proeutectic B2 type beta dendrites and interdendritic eutectic for x=20 and x>20 at.% Fe respectively. However, annealing at 1073 K results in the formation of FCC gamma-phase particles along the grain boundaries as well as grain interior in x=20 at.% Fe alloy. The volume fraction of interdentritic eutectic regions tend to decrease and their morphologies start to degenerate by forming FCC gamma-phase for x>20 at.% Fe alloys with increasing annealing temperatures. Increasing Fe content of alloys induce an enhancement in magnetization and a rise in the Curie transition temperature (T(C)). Temperature scan magnetic measurements and transmission electron microscopy reveal that a transient rise in the magnetization at temperatures well above the T(C) of the alloys would be attributed to the precipitation of a nano-scale ferromagnetic BCC alpha-Fe phase. Retained magnetization above the Curie transition temperature of alloy matrix, together with enhanced room temperature saturation magnetization of alloys annealed at favorable temperatures support the presence of ferromagnetic precipitates. These nano-scale precipitates are shown to induce significant precipitation hardening of the beta-phase in conjunction with enhanced room temperature saturation magnetization in particular when an annealing temperature of 673 K is used. (C) 2011 Elsevier Inc. All rights reserved.