The lattice rearrangement processes of the fcc-bcc phase transformation in ultrathin iron films depend on the sign of the applied epitaxial strain. Pseudomorphic iron films grown on nickel and copper ( 100 ) substrates are under about 1% strain, which is compressive in the case of Ni and tensile in the case of Cu. The phase transformation in the iron/copper films starts by forming misfit dislocation-like ridge structures oriented along 011 directions at about 4.6 ML, which soon develop into bcc phase precipitations with indications of a Pitsch orientation. No such dislocation-like structures have been observed for all growth stages of iron on nickel, where the fcc-bcc transformation starts at 5.5 ML by forming bcc island chains along 001 directions with a significant misfit accommodating eVect. Above 10 ML, the step height of the iron films on nickel increases by 11% to about 2.1 Å as a consequence of the fcc-bcc transformation. The drastic diVerences between the observed transformation phenomena in the two systems are discussed in terms of the specific applied misfit strains and seem to be consistent with former observations of thicker bicrystal systems as well as with continuum theoretical approaches.