We report the high-resolution temperature-dependent photoemission spectra of FeSi. We measure an extremely small gap of less than 5 meV in contrast to electrical-resistivity, magnetic-susceptibility, and optical-conductivity measurements, which show an activation energy of about 60 meV. The difference in the gap value is attributed to localized states near the Fermi level, which effectively increase the activation energy associated with a charge or spin excitation as observed in conductivity and susceptibility studies. The density of states at the Fermi level increase systematically on increasing temperature and result in a transition to a metallic phase at 300 K. The data suggest that localization effects play an important role in the ground-state properties of FeSi. © 1994 The American Physical Society.