Steam oxidation is considered the main attack form involved in the destruction of a superheater tubes in the superheater of water-tube boiler. In this work, the effect of an aluminide coating on the way steam reacts with SS321 steel in a superheater was studied. Aluminide coating was done by powder cementation at 800 °C for 7 h and then heat treatment at 900 °C for 1 h. The coating was made with an Al-rich Fe2Al5 phase, with an inner (diffusion) layer of 5 µm and an outer layer of 25 µm. The grains were all the same size, and there were few holes. The samples were subjected to a constant stream of supersaturated water vapor at a temperature of 700 °C. The weight gain of uncoated and coated samples was measured as 1 mg/cm2 and 0.5 mg/cm2 after 20 h, and 2.5 mg/cm2 and 0.7 mg/cm2 after 350 h, respectively. The remarkable weight loss of the coated samples after 20 h and up to 350 h was attributed to the formation of stable Al2O3 oxides. This was although in the uncoated samples, the outer and inner layers of the coating were composed of Fe-rich oxides (magnetite) and Cr-rich oxides (Cr-Fe spinel oxides), respectively. Microstructural studies showed that with the increase in oxidation time, the inner layer (diffusion) increases from 5 µm to 25 µm, which is attributed to the diffusion of substrate particles towards the coating during oxidation.