Al-3.3Fe-10.7Si alloy has been experimentally made with spray deposition technology. The internal friction of the alloy which was directly associated with the microstructures under spray deposited, extruted and heat treated conditions has been investigated using a low frequency inverted torsion pendulum over the temperature region of 10-300 degrees C. An internal friction peak was observed in the temperature range 50-250 degrees C in the present alloy. The Q(-1) peak decreased after extruted and in subsequent to the earliness of isothermal annealing, which was found to be directly attributed to the precipitation of FeAl2 and Al-Fe-Si intermetallics from the supersaturated aluminium alloy matrix. We suggest that the internal friction peak in the alloy originates from grain boundary relaxation, but the grain boundary relaxation can also be affected by FeAl2 and Al-Fe-Si intermetallics at the grain boundaries, which will impede grain boundary sliding.