The structure and magnetic properties of Nd(Al1-xFex)2 alloys with x = 0, 0.05, 0.1 and 0.2, which adopt cubic MgCu2-type structure with space group Fd(bar over 3)m, are studied using x-ray powder diffraction, static and dynamic magnetization, and calorimetric measurements. The lattice constant decreases linearly with increasing Fe content from 8.0106(4) Å to 7.9044(4) Å. Large thermal irreversibilities between zero-field-cooled and field-cooled conditions are observed for all substituted samples. The magnetic transition temperatures exhibit a minimum for x = 0.1, and coercive fields at 2 K increase from 70 Oe for x = 0 to 6.3 kOe for x = 0.2. The absence of λ-type peak in the heat capacity data, frequency dependence of ac magnetic susceptibility, and memory effects indicate formation of a cluster-glass magnetic state when x ≥ 0.1.