In order to expand the application of oxide dispersion-strengthened (ODS) steel, a composite material is manufactured by adding mechanically alloyed ODS steel powder to conventional steel and investigated in terms of microstructure and wear properties. For comparison, a commercial automobile part material is also tested. Initial microstructural observations confirm that the composite material with added ODS steel contains i) a pearlitic Fe matrix area and ii) an area with Cr-based carbides and ODS steel particles in the form of a Fe-Fe3C structure. In the commercial material, various hard Co-, Fe-Mo-, and Cr-based particles are present in a pearlitic Fe matrix. Wear testing using the VSR engine simulation wear test confirms that the seatface widths of the composite material with added ODS steel and the commercial material are increased by 24% and 47%, respectively, with wear depths of 0.05 mm and 0.1 mm, respectively. The ODS steel-added composite material shows better wear resistance. Post-wear-testing surface and cross-sectional observations show that particles in the commercial material easily fall off, while the ODS steel-added material has an even, smooth wear surface.