We have previously shown the growth mode of Ag on Fe(110) to be Stranski-Krastanov with Ag islands growing on top of two intermediate Ag layers. In the present studies, Fe was deposited on thin annealed Ag layers on Fe(110). The growth and interdiffusion of these layers were monitored by reflection high energy electron diffraction (RHEED) and Auger electron spectroscopy (AES). For deposition at room temperature (RT), Fe islands grow in a (HO) orientation on the Ag/Fe(110) substrate. These islands form facets similar to those obtained at an equivalent coverage for the Fe/Fe(110) system. AES indicates that there is some intermixing between the deposited Fe atoms and underlying Ag layers at RT. During annealing, or for deposition at 250°C, Ag floats to the top while the Fe islands flatten to form layers at the Ag/Fe(110) interface.