The combination of low-cost alloying elements like Fe and powder metallurgy, a route with potential to lower the cost of processing titanium alloys, is an interesting option to process cost-effective titanium alloys. Using thermomechanical processing can help improve their behaviour, but limited work has been devoted to it. Additionally, there is a lack of knowledge on their fatigue performance. In this work, different extrusion and heat treatment conditions were applied to develop different microstructures and textures, and their effect on the tensile and fatigue behaviour was thus studied. Small differences in the extrusion and annealing temperatures, when in the alfa-beta phase, result in strong Fe partitioning between alfa and prior beta grains, developing an ultrafine transformed beta microstructure instead of lamellar colonies. This results in a remarkable strengthening of the alloy plus an increase in ductility. Despite reaching practically full density after extrusion, residual pores influence the fatigue behaviour (but not the tensile behaviour), and the extent of their influence depends on the intrinsic strength of the alloy. By carefully selecting the thermomechanical processing conditions, the cost-effective powder metallurgy Ti-5Fe alloy can match the fatigue performance of the workhorse Ti-6Al-4V alloy.