To control the microstructure of FeCrAl-ODS (oxide dispersion strengthened) alloy using γ/α transformation, the austenite-stabilizing element cobalt was added to Fe-12Cr-(3,5)Al ODS alloys at 15 and 25 wt% in accordance with the phase diagram computed using the thermodynamic analysis software FactSage. Four designed alloys were fabricated using mechanical alloying, spark plasma sintering, and final annealing at 1150 °C. Three phases were identified: matrix with bcc structure, chromium carbide, and dispersed CoAl intermetallic compound. Nanosized oxide particles were also characterized by transmission electron microscopy. As the temperature increased to 1000 °C, the 3Al-alloys with 15 or 25 wt% Co and 5Al-alloy with 25 wt% Co took α to γ transformation, whilst α-phase remained in the 5Al-alloy with 15 wt% Co. Suppression of α to γ transformation in high Al and low Co alloy was successfully explained by the reduced driving force for α to γ transformation, compared with the pinning of α/γ interfaces by oxide particles. Continuous cooling transformation curves constructed by in-situ high temperature X-ray diffraction showed that microstructure control using the γ/α phase transformation is feasible.