The precipitation mechanisms of $\eta$ phase in a FeNi--based alloy were explored. It was revealed that $\eta$ phase has a coherent orientation relationship with $\gamma$ matrix as follows, $\{001\}_{\eta}//\{111\}_{\gamma}$, $\langle 110\rangle_{\gamma}//\langle 210\rangle_{\eta}$. The precipitation of $\eta$ phase proceeded by nucleating at $\gamma^{\prime}$ phase at random grain boundaries through forming stacking fault layer caused by slip of partial dislocations and by growing in step mode, which was controlled by the long distance diffusion of atoms. The grain boundary migrated with precipitated $\eta$ phase into the neighbor grain which was incoherent with $\eta$ phase. The solution and disappearing of $\gamma^{\prime}$ was caused by precipitation of $\eta$ phase.\