This study deals with structural and optical properties of β-FeSi2 layers produced by direct ion beam mixing of Fe/Si bilayers with Xe ions. By irradiation of 35 nm Fe on Si, at 600 °C with 205 keV Xe to 2 × 1016 ions/cm2, the formation of ~ 105 nm single-phase β-FeSi2 layers was achieved. Their structures were analyzed by Rutherford backscattering spectroscopy. X-ray diffraction, conversion electron Mössbauer spectroscopy, high resolution transmission electron microscopy, and photo-absorption. The structural analyses revealed that the β-FeSi2 layers grow in the form of irregularly shaped crystal grains, with a pronounced surface morphology, but with a rather sharp silicide/silicon interface. The grains that originate from the interface are epitaxially oriented relative to the Si(100) substrate. Optical absorption, as compared with that in β-FeSi2 layers produced by ion beam synthesis or co-sputter deposition, indicates a direct band gap of 0.92 eV. A pronounced surface roughness of the ion beam mixed layers yielded photo-absorption approximately three times higher as compared with the other two sets of samples. The band gap stays nearly constant over the temperature range from 80 to 295 K. This is tentatively assigned to a high degree of structural disorder and stress induced in the ion beam mixed β-FeSi2 layers. © 2002 Elsevier Science B.V. All rights reserved.