The effect of Fe-rich particles has been a topic for discussion in the aluminum casting industry because of the negative impact they exert on the mechanical properties. However, there are still contradictions on the effects of various morphologies of Fe-particles. In this study, microstructural characterization of tensile tested samples has been performed to reveal how unmodified and modified Fe-rich particles impact on the tensile behavior. Analysis of additions of Fe modifiers such as Mn and Cr, showed higher amounts of primary Fe-rich particles (sludge) with increased porosity and, as result, degraded tensile properties. From the fracture analysis of tensile tested hot isostatic pressed (HIPed) samples it could be concluded that the mechanical properties were mainly governed by the Fe-rich particles, which were fracturing through cleavage, not by the porosity.