Gas atomization mechanical alloying and hot pressing have successfully made high temperature Al-9.45Fe-4.45Cr alloy. The microstructure and mechanical properties of this alloy has been studied by using optical microscope, scanning electron microscope, transmission electron microscope, X-ray diffractometer and compressive tester. It contains high concentration of transition elements of Fe and Cr, which form thermally stable dispersoids in the aluminum matrix. Proper oxidation of powders during ball milling strengthens the bulk extrudates by providing the obstacle particles. The oxide particles are very chemically and thermally stable and prevent the coarsening of the intermediate compounds.