The Ti-5Al-2.5Fe alloy is a cheaper α+β Ti alloy with mechanical performance comparable to those of the Ti-6Al-4V alloy whose cost could be further reduced by producing it via powder metallurgy. In this study, the effect of the thermomechanical deformation temperature on the properties of the Ti-5Al-2.5Fe alloy produced from elemental powders was studied. Furthermore, the effect of the modification of the microstructure via heat treatments on the properties of the forged billets was analysed. This study demonstrates that powder forging can successfully be used to manufacture α+β Ti alloys and the selection of the forging temperature significantly affects the mechanical behaviour, where the lower the forging temperature the stronger and the less ductile the material. The post-processing via solution treatment plus aging generally improves the mechanical properties of the Ti-5Al-2.5Fe alloy, especially in terms of ductility, without compromising the strength.