The microstructure of an AlFe combinatorial thin film library with a compositional spread ranging from 5 to 23 at.% Fe was analysed. The local crystallographic properties were correlated to the film microstructure dynamic changes. The presence of a transitional region between two metastable phases in the AlFe alloys was identified and related to a percolation threshold near Al-12 at.% Fe. Anodic oxidation of the parent metals produced a mixed oxide on the surface of the AlFe library. XPS investigation of the mixed oxides suggested an intimate mixing of Al2O3 and Fe2O3.