Powder metallurgy techniques such as gas atomization and mechanical milling have been used to develop a FeAl alloy with enhanced ductility and strength at both low and high temperature. The improvement method combines ductility increase by grain boundary strengthening, grain size reduction and oxide dispersion strengthening. The material has been characterized and tested in the form of extruded bars. Microstructure, order and texture of as-extruded and heat treated samples have been studied by TEM, X-ray diffraction and Moessbauer spectroscopy. Physical and mechanical properties of the material are compared to some conventional engineering alloys in order to discuss the conceivable applications in aeronautical and automotive industries. (authors). 22 refs., 4 figs., 2 tabs.