Fe-21Cr-4Al-xGd (x = 0, 1, 2, 4 wt%) alloy was prepared by spark plasma sintering (SPS) in this study. The effect of Gd on the microstructure, mechanical properties and damping properties of Fe-21Cr-4Al alloy was investigated. The results show that the compressive strength and hardness of the alloy containing Gd are improved by fine grain strengthening and second phase strengthening, and the hardness and compressive strength of the Gd alloy increase with increasing Gd content. When Gd content is 4 wt%, the average grain size is 7.20 μm, which is much smaller than Fe-21Cr-4Al (9.15 μm). The hardness and compressive strength of the alloy are increased by 16.38% and 9.87%, respectively, compared with those of the alloy without Gd. The microstructure and phase composition show that the alloy is mainly composed of the body-centered cubic (BCC) structure α-Fe phase, Gd and Gd 2 O 3 . A large number of Gd and Gd 2 O 3 are scattered in the grain interior and grain boundary. The peak intensity of the α-Fe phase decreases with increasing Gd content. The Gd containing alloys maintain high damping properties in a wide range of strain amplitudes, and the maximum damping capacity of the Fe-21Cr-4Al-2Gd alloy is Q max −1 =0.072. In addition, after Gd is added to the Fe-21Cr-4Al alloy, ferromagnetic damping and dislocation damping exists in the appropriate strain amplitude region to jointly increase the internal friction, which may enhance the damping capacity of the alloy. • FeCrAl alloys with different compositions were sintered by spark plasma sintering (SPS). • Gd doped alloy has better mechanical properties and damping properties than FeCrAl alloy. • The damping properties of the alloy with Gd are composed of ferromagnetic damping and dislocation damping. • Gd-rich phase is located near grain boundary and dislocation to refine the alloy grain and hinder dislocation movement. • The Gd containing alloys maintain high damping properties in a wide range of strain amplitudes.