In this study, production of Si-Al-Fe alloy with coal fly ash and bauxite as the major raw materials in the induction furnace at high temperatures were studied. The results show that carbothermal reduction of mixture of coal fly ash, bauxite, hematite, silica and CaF2 in the induction furnace can produce Si-Al-Fe alloy, and it can therefore improve the utilization value of fly ash and reduce its pollution to the environment. The reduced alloy phase mainly contains ~23% Si, ~19% Al and ~52% Fe, and small amounts of P and S. The main phases of alloy are Al0.5Fe3Si0.5, FeSi, SiC, Si5C3, FeC, and TiC.