This article describes the microstructural evolution and tensile properties of Fe-Cr model alloy strengthened by nano-scale NbC particles. According to the results obtained from X-ray diffraction and transmission electron microscope with Energy Dispersive Spectrometer, the bcc ultrafine grains and the disordered phase of Nb-rich nano-clusters were observed in the milled powders. The hot pressing (HP) resulted in a nearly equiaxed ferritic grains and dispersed nano-scale NbC (~8 nm) particles. The microstructure studies reveal that the formation of NbC nanoparticles is composed of nucleation and growth of the Nb-rich nano-clusters involving diffusion of their component. At room temperature the material exhibits an ultimate tensile strength of 700 MPa, yield strength of 650 MPa, and total elongation of 11.7 pct. The fracture surface studies reveal that a typical ductile fracture mode has occurred during tensile test.