An oxide dispersion strengthened ferritic-martensitic steel with yttrium oxide (Y2O3) was produced by mechanical alloying and hot isostatic pressing techniques for high-performance structures of fusion energy devices. The structure of the nanometer-sized Y2O3 particles analysed by HRTEM shows a strong correlation of its crystallographic orientation with the alloy lattice. The orientation correlations [110](YO)parallel to [111](FeCr) and (1(11) over bar)(YO)parallel to (1(1) over bar 0)(FeCr) were found. The strong orientation correlation appears during HIPing processes around 1050degreesC, which is significantly lower than the melting temperature Of Y2O3 that amounts to 2500degreesC. (C) 2002 Elsevier Science B.V. All rights reserved.