The effect of the initial microstructure (recrystallized or cold-rolled) on the nitride precipitation process upon gaseous nitriding of ternary Fe-4.3 at. pct Cr-8.1 at. pct Al alloy was investigated at 723 K (450°C) employing X-ray diffraction (XRD) analyses, transmission electron microscopy (TEM), atom probe tomography (APT), and electron probe microanalysis (EPMA). In recrystallized Fe-Cr-Al specimens, one type of nitride develops: ternary, cubic, NaCl-type mixed Cr 1Àx Al x N. In cold-rolled Fe-Cr-Al specimens, precipitation of two types of nitrides occurs: ternary, cubic, NaCl-type mixed Cr 1Àx Al x N and binary, cubic, NaCl-type AlN. By theoretical analysis, it was shown that for the recrystallized specimens an energy barrier for the nucleation of mixed Cr 1Àx Al x N exists, whereas in the cold-rolled specimens no such energy barriers for the development of mixed Cr 1Àx Al x N and of binary, cubic AlN occur. The additional development of the cubic AlN in the cold-rolled microstructure could be ascribed to the preferred heterogeneous nucleation of cubic AlN on dislocations. The nitrogen concentration-depth profile of the cold-rolled specimen shows a stepped nature upon prolonged nitriding as a consequence of instantaneous nucleation of nitride upon arrival of nitrogen and nitride growth rate-limited by nitrogen transport through the thickening nitrided zone.