The microscopic behavior of iron in relaxed Si 1Ϫx Ge x alloy is addressed in the present work where various new aspects are highlighted. In p-type materials two types of defects involving iron may coexist under equilibrium; the isolated form, Fe i , and the iron-acceptor pair, Fe i -A s . The latter complex is favored over the former because it is thermodynamically more stable. In each case the iron atom stabilizes at the interstitial tetrahedral site. When boron is the acceptor impurity, both the isolated and the paired forms introduce donorlike levels, distant from each other by 0.28 eV. In the relaxed Si 1Ϫx Ge x bulk alloy, these levels are shown to remain separated by the same amount. However, they shift toward the valence band much faster than the shrinkage of the band gap when the Ge content is increased. The consequence is that the pair-related donor level merges with the valence band at a fairly low alloy composition (xу7%) while the iron donor level is predicted to disappear from the gap for xу25%. We also show that neither the entropy nor the enthalpy of migration of free iron, whose experimental determination requires one to take into account the abovementioned shift, are affected by alloying. Therefore, the fast diffusing character, attributed to iron in silicon, still holds in the alloy. The origin of spectral broadening, related to the chemical disorder, is discussed. Finally, the major technological implication emerging from our new findings is addressed. In particular, we show that both the gettering by segregation, routinely used in silicon, and the field-induced outdiffusion, established in n-type silicon ten years ago, are totally inefficient in the Si 1Ϫx Ge x alloy.