Fe-10 at.% Al-2.5 at.% Zr and Fe-20 at.% Al-2.5 at.% Zr alloys were deformed between room temperature and 700 ^°C. The materials show a flow stress plateau at about 300 MPa up to 600 ^°C for the material with 10 at.% Al and above 600 MPa up to 400 ^°C for the alloy with 20% Al. The high flow stresses compared to Fe-Al reference materials are partly due to the addition of Zr. The strain rate sensitivity of the flow stress was measured by stress relaxation and strain rate cycling tests. It is low up to 400 ^°C and high between 450 and 600 ^°C, i.e. in the range of the flow stress decrease. The microstructures of the undeformed materials are described in Part I of this paper. Micrographs of the deformed specimens taken in a high-voltage electron microscope reveal that the deformation occurs mainly within the soft Fe-Al grains and in the Fe-Al component of the grain boundary eutectic. The deformation data are interpreted in terms of solution hardening from the Al solute, dynamic strain ageing due to the Cottrell effect of the same defects, the athermal stress component of elastic dislocation interactions, the Hall-Petch contribution from the grain size, and the strengthening effect of the grain boundary layers.