This article describes the development of an Si-based light-emitting diode with β-FeSi2 nanocrystals embedded in the active layer. Favorable epitaxial conditions allow us to obtain a direct band gap type-I band alignment Si/β-FeSi2 nanocrystals/Si heterostructure with optical transition at a wavelength range of 1500-1550 nm at room temperature. Transmission electron microscopy data reveal strained, defect-free β-FeSi2 nanocrystals of diameter 6 and 25 nm embedded in the Si matrix. Intense electroluminescence was observed at a pumping current density as low as 0.7 A/cm2. The device reached an optical emission power of up to 25 μW at 9 A/cm2 with an external quantum efficiency of 0.009%. Watt-Ampere characteristic linearity suggests that the optical power margin of the light-emitting diode has not been exhausted. Band structure calculations explain the luminescence as being mainly due to radiative recombination in the large β-FeSi2 nanocrystals resulting from the realization of an indirect-to-direct band gap electronic configuration transformation arising from a favorable deformation of nanocrystals. The direct band gap structure and the measured short decay time of the luminescence of several tens of ns give rise to a fast operation speed for the device. Thus a method for developing a silicon-based photonic integrated circuit, combining complementary metal-oxide-semiconductor technology functionality and near-infrared light emission, is reported here.