The characteristics of rapid solidification and microstructure formation of Fe-50wt%Sn hypermonotectic alloy heve been investigated. The rapid solidification microstructure is composed of regular arrays of fiberlike βSn phase, αFe phase distributed in fiber interspacings, and a small amount of metallic compounds. The angle between the fiber array and ribbon surface is within the range of 0—15°. According to the heat transfer equation and NavierStokes equation under melt-spinning condition, the solidification behaviors and microstructure formation processes are analyzed theoretically. It is revealed that the liquid phase flow has a remarkable effect on the phase separation of hypermonotectic alloy. This separation behavior occurs in the bottom of the melt puddle, which is about 200μm from roller surface, where the shapes of separated L2 droplets are deformed by shear stress. The collision/stretch of the separated L2 droplets finally leads to the formation of fiberlike microstructures. Due to the high cooling rate, the peritectic transformation at elevated temperatures is suppressed, thus resulting in the existence of some metastable phase at room temperature.