The　Al-containing　particles　in　ODS　alloys　with　Al　addition　usually　exhibit　relatively　large　size,　and　inevitably　result　in　a　limited　improvement　in　mechanical　properties.　In　this　paper,　W-Al-Y2O3　alloy　was　prepared　by　a　two-step　sintering　process　to　refine　the　Al-containing　particles.　Microstructure　evolution　of　dispersoid　particles　was　characterized　by　scanning　electron　microscope　(SEM),　electron　probe　microanalysis　(EPMA)　and　transmission　electron　microscopy　(TEM).　During　the　first　holding　step　at　1000　degrees　C,　the　dissolved　Al　precipitated　directly　from　W　matrix,　where　the　formed　gamma-Al2O3　particles　were　nano-sized　and　developed　a　coherent　relationship　with　W　matrix.　This　coherent　relationship　hindered　transformation　of　gamma-Al2O3　into　submicron-sized　alpha-Al2O3.　Moreover,　the　nano-sized　gamma-Al2O3　contributed　to　formation　of　fine　Y3Al5O12　dispersoid　particles　with　the　sintering　tem-perature　further　increased　to　1600　degrees　C.　71%　of　the　dispersoid　particles　were　distributed　within　grains　and　most　of　them　were　nano-sized　gamma-Al2O3　and　Y3Al5O12,　giving　a　fine　grain　size　of　0.49　mu　m.　Due　to　the　refined　micro-structure,　the　compressive　strength　and　microhardness　of　W-Al-Y2O3　alloy　reached　2545.9　MPa　and　787.8　HV,　respectively.