The effects of Zr addition on the microstructural evolution and mechanical properties of FeCrAl alloys were investigated. Fine Fe2Zr particles with their sizes ranging from 0.5 to 1.2 μm were observed when the alloying element Zr was introduced in FeCrAl alloy. The addition of Zr led to the formation of Fe2Zr particles either within the grains or on the grain boundaries, and this was found to enhance the strength of the FeCrAl alloys. Moreover, the Fe2Zr particles stabilized the microstructures by promoting recrystallization nucleation and retarding grain growth. The critical size of the Fe2Zr particles for stimulating recrystallization nucleation and the activation energy of grain boundary migration during recrystallization were determined. The effects of Fe2Zr particles on particle-stimulated nucleation behavior and recrystallization grain growth dynamics are discussed.