AISI 1018 carbon steel exhibits intergranular attack in molten aluminum chloride. To explore grain boundary corrosion initiation and propagation, tests have been conducted on several iron-based alloys, heat treated to recrystallization temperature, and using molten aluminum chloride and its mixture with other molten chlorides environments. Pure iron, A106, and AISI 1018 carbon steel have been exposed to both pure aluminum chloride and ferric chloroaluminate melt in both their recrystallized and as-received, cold-worked conditions. Intergranular corrosion is observed in both 1018 and A106 carbon steels in all the salts whereas pure iron only shows pitting. Materials processing has varying effects on the corrosion depths of 1018 and A106 carbon steels. The grain boundary microchemistry of 1018 carbon steel is examined with in-situ fracture Auger spectroscopy where molybdenum and carbon segregation are found, and a mechanism is proposed to explain the present corrosion phenomenon.