The compatibility of the wrought Al-Ca alloy with the element Fe was investigated in the present study. In this work, both the Al-Ca alloy and Al-Ca-Fe alloy were synthesized through melting, casting, heat treatment, and rolling. A new ternary Al-Ca-Fe eutectic phase, identified as Al10CaFe2 with an orthorhombic structure, demonstrated enhanced performance, as revealed by nanoindentation tests. Combining the results of the nanoindentation and EBSD, it can be inferred that during the rolling and heat treatment process, the divorced eutectic phases were broken and spheroidized, and the structure of the Fe-rich alloy became finer, which promotes the formation of fine grains during the process of dynamic recrystallization and effectively hindered the grain growth during thermal treatment. Consequently, the strength of the as-rolled Al-Ca alloy was improved with the addition of 1 wt.% Fe while the ductility of the alloy was maintained. Therefore, adding Ca into the high-Fe content recycled aluminum altered the form of the Fe-containing phases in the alloy, effectively expanding the application scope of recycled aluminum alloy manufacturing. This approach also offered a method for strengthening the Al-Ca aluminum alloys. Compared to the traditional approach of reducing Fe content in alloys through metallurgical means, this study opened a new avenue for designing novel, renewable aluminum alloys highly compatible with impurity iron in scrap.