The transition from the atomically ordered B2-phase to the chemically disordered A2-phase and the concomitant deformation-induced ferromagnetism have been investigated in bulk polycrystalline Fe60Al40 (at.%) alloys subjected to compression processes. A detailed correlation between structural, magnetic and mechanical properties reveals that the generated ferromagnetism depends on the stress level but is virtually independent of the loading rate. The mechanisms governing the induced ferromagnetism also vary as the stress level is increased. Namely, in the low-stress regime both lattice cell expansion and atomic intermixing play a role in the induced ferromagnetic behavior. Conversely, lattice expansion seems to become the main mechanism contributing to the generated ferromagnetism in the high-stress regime. Furthermore, a correlation is also observed between the order–disorder transition and the mechanical hardness. Hence, a combination of magnetic and mechanical measurements can be used, in synergetic manner, to investigate this deformation-induced phase transition.