Microstructural heterogeneity is a feature of common occurrence in alloys additively manufactured using techniques such as laser powder bed fusion (LPBF). Additionally, chemical heterogeneities can arise both at micro- and meso-scales, especially when powder mixtures are used. While such chemical heterogeneities are considered undesirable hitherto, recent studies show that they may be beneficial in tailoring for the desired mechanical property combinations. In this study, we fabricated a graded alloy coupon with the mixed powders of the CoCrMo alloy and elemental Ni and investigated the microstructural and mesoscopic chemical heterogeneities in it. Chemical heterogeneities, which are either rich in Ni or CoCrMo, were observed due to the incomplete mixing of the powders. Banded patterns, with alternating layers that are enriched with different chemical species, were also observed. Distinct stacking fault energies between these chemical heterogeneities result in distinct deformation mechanisms; while planar slip and strain-induced martensitic transformation occur in the CoCrMo-rich heterogeneities, homogenous deformation associated with the wavy slip occurs in the Ni-rich ones. Detailed mechanical property characterizations show that the microscale chemical segregation not only strengthens the matrix but also improves the work hardening ability of the bulk material through kinematic hardening mechanism. These findings substantiate the key design principles for exploiting chemical segregations that form during in situ alloying for simultaneous enhancement of the strength and ductility in AM alloys.