Y2O3 dispersion-strengthened Molybdenum (Mo) composites were prepared by the mechanical alloying of Mo and Y powders then consolidation by spark plasma sintering. The effects of Chromium (Cr) addition (0 wt. %, 5 wt. %, 10 wt. % and 15 wt. %, respectively) on the mechanical performance and high-temperature oxidation resistance of Mo-Y2O3 were investigated. The introduction of Cr had a significant influence on the mechanical property and oxidation resistance of the Mo-Y2O3 composite. The highest bending strength reached 932 MPa when the addition of Cr content was 5 wt. % (Mo-5Cr-1Y sample). This improvement is likely attributable to the dual mechanism of grain refinement and solid solution strengthening. Moreover, the Mo-5Cr-1Y sample showed the thinnest oxide layer thickness after high-temperature oxidation tests, and exhibited the best oxidation resistance performance compared with the other samples. First principle calculation reveals that Cr could improve the Mo-MoO3 interface bonding to prevent rapid spalling of the oxide layer. Meanwhile, Cr also facilitates the formation of the dense Cr2(MoO4)3 layer on the surface, which can inhibit further oxidation.