FeGa3 is a well known d-p hybridization induced intermetallic bandgap semiconductor. In this work, we present the experimental and theoretical results on the effect of Al substitution in FeGa3, obtained by x-ray diffraction (XRD), temperature dependent resistance measurement, room temperature Mossbauer measurements and density functional theory based electronic structure calculations. It is observed that upto x = 0.178 in Fe(AlxGa1-x)3, which is the maximum range studied in this work, Al substitution reduces the lattice parameters a and c preserving the parent tetragonal P42/mnm crystal structure of FeGa3. The bandgap of Fe(AlxGa1-x)3 for x = 0.178 is reduced by ~ 24% as compared to FeGa3. Rietveld refinement of the XRD data shows that the Al atoms replace Ga atoms located at the 8j sites in FeGa3. A comparison of the trends of the lattice parameters and energy bandgap observed in the calculations and the experiments also confirms that Al primarily replaces the Ga atoms in the 8j site.