In this paper optical absorption and photoluminescence (PL) techniques are used to study the optical properties of βFeSi2 layers fabricated by Ion Beam Synthesis (IBS). The way in which the band-gap varies when a small dose of Co is added before Fe implantation is also investigated. Our results indicate that the band-gap for βFeSi2 is direct with a value of 0.87eV. When a sufficiently high dose (1 ×10 16cm2) of Co is implanted prior to Fe we see the appearance of an additional band-gap after annealing at 1173K which we attribute to the formation of a ternary CoxFeySiz phase. We also show that by placing the sample in a hydrogen plasma it is possible to raise the temperature at which PL occurs in βFeSi2 to σ 200K.