Abstract: How to increase strength without sacrificing ductility has been developed as a key goal in the manufacture of high-performance metals or alloys. Herein, the double-nanophase intragranular yttrium oxide dispersion strengthened iron alloy with high strength and appreciable ductility was fabricated by solution combustion route and subsequent spark plasma sintering, and the influences of yttrium oxide content and sintering temperature on microstructures and mechanical properties were investigated. The results show at the same sintering temperature, with the increase of yttrium oxide content, the relative density of the sintered alloy decreases and the strength increases. For Fe–2wt%Y₂O₃ alloy, as the sintering temperature increases gradually, the compressive strength decreases, while the strain-to-failure increases. The Fe–2wt%Y₂O₃ alloy with 15.5 nm Y₂O₃ particles uniformly distributed into the 147.5 nm iron grain interior sintered at 650°C presents a high ultimate compressive strength of 1.86 GPa and large strain-to-failure of 29%. The grain boundary strengthening and intragranular second-phase particle dispersion strengthening are the main dominant mechanisms to enhance the mechanical properties of the alloy.