The microstructure and the strength of an iron mechanically milled with various amounts of oxygen (i.e., 0.2, 0.6, and 1.5 mass pct) were studied. The samples were subjected to a mechanical milling in an argon atmosphere for 100 hours followed by consolidating bar rolling to a total reduction of about 86 pet at 700 degreesC. The microstructure of the steels sensitively changed depending on the oxygen content, i.e., on the volume fraction of the oxide particles. The average grain size decreased from about 0.7 to 0.2 mum with an increase in the amount of oxygen. Moreover, the misorientation distributions of the grain boundaries were different in the samples with various amounts of oxygen. A relatively large fraction of low-angle boundaries arranged crosswise to the rolling axis was registered in the samples with 0.2 and 0.6 pct oxygen, while the near random distribution of the boundary misorientations was obtained in the specimens with 1.5 pct oxygen. The effect of dispersed particles on the structure evolution and the relationship between microstructures and some mechanical properties are discussed.