A Fe–3wt pctSi alloy was gas nitrided to study the effect of Si on the Fe nitride formation. Both ε-Fe3N1+x and γ′-Fe4N were observed at nitriding conditions only allowing to form single-phase γ′ layers in pure α-Fe. During short nitriding times, ε and γ′ simultaneously grow in contact with Si-supersaturated α-Fe(Si). Both nitrides almost invariably exhibit crystallographic orientation relationships with α-Fe, which are indicative of a partially displacive transformation of α-Fe being involved in the initial formation of ε and γ′. Due to Si constraining the Fe nitride growth, such transformation mechanism becomes highly important to the nitride layer formation, causing α-Fe-grain-dependent variations in the nitride layer morphology and thickness, as well as microstructure refinement within the nitride layer. After prolonged nitriding, α-Fe is depleted in Si due the pronounced precipitation of Si-rich nitride in α-Fe. The growth mode of the compound layer changes, now advancing by conventional planar-type growth. During nitriding times of 1 to 48 hours, ε exists in contact with the NH3/H2-containing nitriding atmosphere at a nitriding potential of 1 atm−1/2 and 540 °C, only allowing for the formation of γ′ in pure Fe, indicating that Si affects the thermodynamic stability ranges of ε and γ′.