Achieving superior mechanical properties of Al alloys with high content of Fe impurities is very challenging. Here, a feasible method was applied to accommodate high Fe content (∼2.2 wt.%) and obtain superior strength in an Al–5Mg2Si–2Mg–2Fe alloy by using additive manufacturing. Heterogeneous distribution of Fe, including a high number density of α-Al12(Fe,Mn)3Si particles distributed at the melting pool boundary and excessive Fe segregated along the cell boundaries that divided by Mg2Si eutectics, was verified as the beneficial factor for the alloy design and strength enhancement. In addition to the heterogeneous grains that contain fine cells, the interactions between dislocations and coherent Mg2Si eutectics and the α-Al12(Fe,Mn)3Si particles played an important role in improving the mechanical properties. This work represents a breakthrough in recycling high-strength Al alloys with extremely high Fe doping for green industrial application through additive manufacturing.