Mechanical alloying under various gas atmospheres such as Ar, an Ar-$H_2$ mixture, and He gases were carried out, and its effects on the powder properties, microstructure and mechanical properties of ODS ferritic steels were investigated. Hot isostatic pressing and hot rolling processes were employed to consolidate the ODS steel plates. While the mechanical alloyed powder in He had a high oxygen concentration, a milling in Ar showed fine particle diameters with comparably low oxygen concentration. The microstructural observation revealed that low oxygen concentration contributed to the formation of fine grains and homogeneous oxide particle distribution by the Y-Ti-O complex oxides. A milling in Ar was sufficient to lower the oxygen concentration, and this led a high tensile strength and fracture elongation at a high temperature. It is concluded that the mechanical alloying atmosphere affects oxygen concentration as well as powder particle properties. This leads to a homogeneous grain and oxide particle distribution with excellent creep strength at high temperature.