Display omitted •Zr-rich IMCs were induced in Fe-36Ni Invar alloy with the addition of Zr.•There were fine grain and high dislocation density in the Zr-treated alloy.•Strength better than Zr-free alloy was obtained by Zr treatment.•Zr treatment modified the coefficient of thermal expansion in Fe-36Ni Invar alloy. Nowadays, Invar alloy combining low thermal expansion behavior with improved mechanical properties is highly required. This study investigated the influence of Zr-rich intermetallic compounds (IMCs) on microstructure, thermal expansion behavior, and mechanical properties in Fe-36Ni Invar alloy. Zr-rich IMCs, namely Ni7Zr2 and Ni2Zr were introduced into Fe-36Ni Invar alloy by the addition of 0.22 wt% Zr. The microstructure of Zr-containing alloy was remarkably refined and accompanied by high dislocation density, which was associated with the resistance of recrystallization by the introduction of Zr-rich IMCs. The Invar alloy displayed a sufficiently low coefficient of thermal expansion (CTE) in the temperature interval of 20 °C ∼ 100 °C and 20 °C ∼ 200 °C after Zr treatment, with a CTE constant of 0.66 × 10-6 /°C and 2.07 × 10-6 /°C, respectively. The existence of residual stress and refinement of grain were responsible for an obvious decrease in CTE. Meanwhile, the yield strength increased from 256 MPa to 401 MPa after Zr treatment. The strengthening contribution mainly arose from dislocation strengthening and grain refinement strengthening.