Pre-alloyed ferritic 18Cr steel (Fe-18Cr-2.3W-0.3Ti) powder was milled with and without nano-yttria in high-energy ball mill for varying times until steady-state is reached. The milled powders were consolidated by upset forging followed by hot extrusion. Microstructural changes were examined at all stages of processing (milling, upset forging, and extrusion). In milled powders, crystallite size decreases and hardness increases with increasing milling time reaching a steady-state beyond 5 hours. The size of Y2O3 particles in powders decreases with milling time and under steady-state milling conditions; the particles either dissolve in matrix or form atomic clusters. Upset forged sample consists of unrecrystallized grain structure with few pockets of fine recrystallized grains and dispersoids of 2 to 4 nm. In extruded and annealed rods, the particles are of cuboidal Y2Ti2O7 at all sizes and their size decreased from 15 nm to 5 nm along with significant increase in number density. The oxide particles in ODS6 are of cuboidal Y2Ti2O7 with diamond cubic crystal structure (Fd3 ¯ m) having a lattice parameter of 10.1 Å and are semicoherent with the matrix. The hardness values of extruded and annealed samples predicted by linear summation model compare well with measured values. © 2016, The Minerals, Metals & Materials Society and ASM International.