Development of nuclear grade, iron-based wrought FeCrAl alloys has been initiated for light water reactor (LWR) fuel cladding to serve as a substitute for zirconium-based alloys with enhanced accident tolerance. Ferritic alloys with sufficient chromium and aluminum additions can exhibit significantly improved oxidation kinetics in high-temperature steam environments when compared to zirconium-based alloys. In the first phase, a set of model FeCrAl alloys containing 10–20Cr, 3–5Al, and 0–0.12Y in weight percent, were prepared by conventional arc-melting and hot-working processes to explore the effect of composition on the properties of FeCrAlY alloys. It was found that the tensile properties were insensitive to the alloy compositions studied; however, the steam oxidation resistance strongly depended on both the chromium and the aluminum contents. The second phase development focused on strengthening Fe–13Cr–5Al with minor alloying additions of molybdenum, niobium, and silicon. Combined with an optimized thermo-mechanical treatment, a thermally stable microstructure was produced with improved tensile properties at temperatures up to 741 °C.