Using liquid Fe60Cu40 alloy as a model, the structure of liquid Fe-Cu alloy systems is investigated in the temperature range 1200–2200 K, covering a large metastable undercooled regime, to understand the phase separation of liquid Fe-Cu alloys on the atomic scale. The total pair distribution functions (PDFs) indicate that liquid Fe60Cu40 alloy is ordered in the short range and disordered in the long range. If the atom types are ignored, the total atom number densities and PDFs demonstrate that the atoms are distributed homogenously in the liquid alloy. However, the segregation of Fe and Cu atoms is very obvious with decreasing temperature. The partial PDFs and coordination numbers show that the Cu and Fe atoms are not apt to get together on the atomic scale at low temperatures; this will lead to large fluctuations and phase separation in liquid Fe-Cu alloy.