Iron aluminium alloys, especially those sintered from elemental powders, suffer from low ductility. In this paper, an iron aluminium alloy (Fe40Al) produced by pressure-assisted induction sintering from elemental powders is shown and described. Samples produced by this method show an unexpectedly high ductility in the compression test that is an order of magnitude higher than the literature values. Microstructural observations show plastic behaviour with significant deformation of the grains and a lack of decohesion. At the same time, the tensile properties of these samples remain at much lower levels. An attempt to explain this phenomenon is made and described in this paper.