Iron thin films on ion-etched monocrystalline AlGaAs(0 0 1) substrates were prepared using ion-beam sputtering deposition. The interface reaction was characterised by planar and cross-sectional transmission electron microscopy after annealing in vacuum at 400 degreesC for 1 h. Interdiffusion mainly results in the generation of Fe2As grains growing into the substrate, perpendicular to the Fe/AlGaAs interface. The iron-arsenide grains exhibit an either triangular or trapezoidal shape. Analyses on their morphology and size, as well as on the orientation relationships between Fe2As and AlGaAs phases were also carried out. The appearance of the Fe2As phase is discussed in terms of standard enthalpy for alloy formation. Finally a pyramidal growth model is proposed for Fe2As grains, which mainly involves the four close-packed {1 1 1}AlGaAs planes.