Welding of aluminum/steel dissimilar materials was carried out by continuous fiber laser. The microstructure, element distribution, precipitated phases and failure mechanism of the joint were carefully investigated. Results show that island, block and layered Fe-Al compounds are formed at the interface during the solidification process of weld. They have high hardness and brittleness, leading to low plastic toughness of the material itself. The formation of cracks in welds mainly depends on the continuous or concentrated distribution of brittle Fe-Al compounds at interface, which reduces deformation capacity of materials themselves. The fracture mode of the joint belonges to brittle fracture, and the failure of the joint is caused by Fe-Al brittle compounds at the interface.