Isothermal microcalorimetry and DSC thermal analysis were carried out on mechanically alloyed 7075 (AlZnMgCu), containing 1 vol% of Al2O3-dispersoids, or 1 vol% Al2O3- plus 4 vol% Al4C3-dispersoids in as-quenched, air-cooled and artificially aged conditions in order to study the decomposition behaviour, and its implications for strengthening mechanisms. From combined DSC and isothermal calorimetry, it is inferred that the low hardening potential of P/M dispersion strengthened 7075 is due to irreversible loss of solute atoms rather than because of excess vacancy reduction. It is concluded that magnesium atoms undergo spinell reactions with Al2O3-dispersoids during high temperature processing (i.e. reaction annealing for Al4C3 formation), thereby reducing the potential for precipitation hardening.