Oxide-dispersion-strengthened (ODS) alloy has been developed to increase the mechanical strength of metallic materials; such an improvement can be realized by distributing fine oxide particles within the material matrix. In this study, the ODS layer was formed in the surface region of Zr-based alloy tubes by laser beam treatment. Two kinds of Zr-based alloys with different alloying elements and microstructures were used: KNF-M (recrystallized) and HANA-6 (partial recrystallized). To form the ODS layer, Y2O3-coated tubes were scanned by a laser beam, which induced penetration of Y2O3 particles into the substrates. The thickness of the ODS layer varied from 20 to 55 μm depending on the laser beam conditions. A heat affected zone developed below the ODS layer; its thickness was larger in the KNF-M alloy than in the HANA-6 alloy. The ring tensile strengths of the KNF-M and HANA-6 alloy samples increased more than two times and 20–50%, respectively. This procedure was effective to increase the strength while maintaining the ductility in the case of the HANA-6 alloy samples; however, an abrupt brittle facture was observed in the KNF-M alloy samples. It is considered that the initial microstructure of the materials affects the formation of ODS and the mechanical behavior.