Phosphorescence and excitation spectra have been measured in Fe3+-doped ordered and disordered LiAl5O8. A good fit with the Tanabe-Sugano diagram for a high spin d5 configuration with B=644 cm−1 and C=2960 cm−1 has been obtained. From the calculated 10 Dq value of 8000 cm−1 and a comparison with the excitation spectra of Fe3+ in β-NaAlO2 it has been shown that the spectra are due to Fe3+ ions in tetrahedral interstices. A sharp zero-phonon transition has been observed in the low-temperature phosphorescence and excitation spectra of the ordered phase of LiAl5O8 and its occurrence was found to be correlated with an anomalously small Stokes shift of 500 cm−1. X-ray powder diffraction, phosphorescence, and ESR spectra show that there exist only two phases of LiAl5O8, an ordered and a disordered phase. Evidence is given that the previously postulated metastable phase is a phase with incomplete ordering.