Effects of Ni and Al contents and ratios on the continuous and discontinuous precipitation, mechanical properties, and deformation behavior of NiAl-strengthened steels were systematically studied through a combination of 3D atom probe tomography (APT), transmission electron microscopy (TEM), mechanical tests, and first-principles calculations. Microstructural analyses reveal that increasing the Ni and Al contents results in grain refinement and an increase in chemical potential gradient, both of which promote the discontinuous precipitation. The NiAl-strengthened steels with different Ni and Al contents and ratios exhibit high tensile strengths of 1000–1500 MPa but significantly different ductilities and fracture behaviors. TEM analyses indicate that fine-sized precipitates are sheared by moving dislocations, which leads to the formation of intersecting slip bands, thereby enhancing the work hardening capability. In contrast, coarse-sized discontinuous precipitates are bypassed by dislocations, resulting in a low rate of dislocation storage and hence low work hardening rate. In addition, increasing the Ni/Al ratio changes the fracture mode from brittle cleavage to ductile failure and improves the ductility of the Fe–Ni–Al steels. Microstructural analyses indicate that the ductilizing mechanisms are related to the increased bulk to shear modulus ratio (B/G) and the refined grain structure.