A $CO_2$ laser overlay was conducted by using a Fe-based powder on the AC2B aluminum substrate. Cracks and intermetallic compounds (IMC) were observed inconsistently along the interface between the overlay and post-molten layer. A scanning electron microscopy (SEM) with energy dispersive spectroscopy (EDS) detected some Fe-rich IMC ($Fe_3Al$, FeAl) as well as the brittle Al-rich IMC ($Fe_2Al_5,;FeAl_3$). Micro vickers hardness proved the formation of Al-rich IMC ($FeAl_3$) along the interface by showing HV0.1 $800{sim}900$. Furthermore, nano indentation was successfully applied to investigate the behavior of IMC more precisely than the micro vickers hardness.