Oxide dispersion strengthened (ODS) steels are being developed for fuel claddings in advanced nuclear reactors. 18% Cr ferritic ODS steels containing 0, 0.35, 0.5, and 1wt.% Y2O3 (yttria) were fabricated by mechanical alloying of elemental powders with yttria powder in a Simoloyer attritor. Alloyed powders were placed in a mild steel can and hot-forged in a flowing hydrogen atmosphere at 1473 K. The forged ODS alloys exhibited a fine-grained recrystallized microstructure which is difficult to achieve by powder extrusion. Further, the anisotropy observed in extruded ODS alloys was absent in these forged alloys. This anisotropy in mechanical properties is a major problem in extruded ferritic ODS steels. Most ODS steels are fabricated by powder extrusion. The present work shows that powder forging is a promising route to obtain ODS steels with reduced anisotropy. Powder forging also enables the processing of alloys with high yttria contents. Stress rupture tests were carried out on forged alloy containing 1% yttria. A fine dispersion of yttria particles results in improved stress rupture properties in the forged alloy. This is attributed to the high yttria content of the alloy. The work demonstrates that high yttria ODS steels with improved stress rupture properties can be fabricated using the newly developed powder forging route.