This paper investigates the effect of Fe contamination on the microstructure and mechanical properties of Al-7Si-0.7Mg-Fe2.5 alloy processed by Laser Powder Bed Fusion (LPBF) and heat treated in two different conditions: (1) Solution Heat Treatment (SHT) at 520 °C, followed by artificial ageing at 160 °C (T6), and (2) Direct Artificial Ageing of the as-printed material at 160 °C (DAA). Microstructural characterization was carried out by Optical Microscopy (OM), X-Ray Diffraction (XRD), Scanning Electron Microscopy (SEM), and Transmission Electron Microscope (TEM). Mechanical characterization was carried out by tensile tests at room temperature. The formation of fine AlSiFe phases such as α-AlFeSi, β-AlFeSi, and π-Al8Si6Mg3Fe had no deleterious effect on the mechanical properties compared to previous studies for AlSIMg alloys without Fe. However, compared to the as-printed condition, the T6 heat treatment decreased the ultimate tensile strain significantly, while the elongation to the fracture presented a slight improvement.