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An intrusion detection system (IDS) is a crucial element in cyber security concerns. IDS is a safeguarding module that is designed to identify unauthorized activities in network environments. The importance of constructing IDSs has never been this significant with the growing number of attacks on network layers. This research work was intended to draw the attention of the authors to a different aspect of intrusion detection, considering privacy and the contribution of the features on attack classes. At present, the majority of the existing IDSs are designed based on centralized infrastructure, which raises serious concerns about security as the network data from one system are exposed to another system. This act of sharing the original network data with another server can worsen the current arrangement of protecting privacy within the network. In addition, the existing IDS models are merely a tool for identifying the attack categories without analyzing a further emphasis of the network feature on the attacks. In this article, we propose a novel framework, FEDXAIIDS, converging federated learning and explainable AI. The proposed approach enables IDS models to be collaboratively trained across multiple decentralized devices while ensuring that local data remain securely on edge nodes, thus mitigating privacy risks. The primary objectives of the proposed study are to reveal the privacy concerns of centralized systems and identify the most significant features to comprehend the contribution of the features to the final output. Our proposed model was designed, fusing federated learning (FL) with Shapley additive explanations (SHAPs), using an artificial neural network (ANN) as a local model. The framework has a server device and four client devices that have their own data set on their end. The server distributes the primary model constructed using an ANN among the local clients. Next, the local clients train their individual part of the data set, deploying the distributed model from the server, and they share their feedback with the central end. The central end then incorporates an aggregator model named FedAvg to assemble the separate results from the clients into one output. At last, the contribution of the ten most significant features is evaluated by incorporating SHAP. The entire research work was executed on CICIoT2023. The data set was partitioned into four parts and distributed among the four local ends. The proposed method demonstrated efficacy in intrusion detection, achieving 88.4% training and 88.2% testing accuracy. Furthermore, UDP has been found to be the most significant feature of the network layer from the SHAP analysis. Simultaneously, the incorporation of federated learning has ensured the safeguarding of the confidentiality of the network information of the individual ends. This enhances transparency and ensures that the model is both reliable and interpretable. Federated XAI IDS effectively addresses privacy concerns and feature interpretability issues in modern IDS frameworks, contributing to the advancement of secure, interpretable, and decentralized intrusion detection systems. Our findings accelerate the development of cyber security solutions that leverage federated learning and explainable AI (XAI), paving the way for future research and practical implementations in real-world network security environments. Full article