The reheating of high aluminum content transformation-induced plasticity (TRIP) and light-weight steels in a nitrogen-rich atmosphere has been shown to cause development of subsurface aluminum nitride precipitates in addition to internal and external oxides. It is important to understand how these nitrides and oxides form and their consequences for the quality of steel products. This study looks at model iron-aluminum (up to 8 wt.% aluminum) alloys and uses confocal laser scanning microscopy, XRD, SEM-EDS, and TEM to study the effect of various conditions on the growth and development of these precipitates in a subsurface oxygen-depleted region. It was found that nitrides formed when bulk aluminum content was below 8 wt.% when oxygen was sufficiently depleted due to the internal oxidation. In the samples containing 1 wt.% aluminum, the depth of the internal oxide and nitride zones were in agreement with the model proposed by Meijering. Increasing aluminum content to 3 and 5 wt.% had the effects of modifying the surface-oxide scale composition and increasing its continuity, which gradually decreased the internal precipitation zones with increasing aluminum content. In samples containing 8 wt.% aluminum, a thick continuous oxide sale formed and completely prevented nitrogen and oxygen penetration into the bulk of the sample, thus preventing the formation of any internal precipitates.