Al₂O₃ or Y₂O₃-dispersion strengthened nickel powders were prepared by mechanical alloying of carbonyl nickel powder with Al- or Y-alkoxide for various time in the air atmosphere followed by heat-treating in a hydrogen atmosphere at 873K. The changes in the properties of the powder of each system with milling time were investigated. The results obtained are summarized as follows: 1) In both Ni-Al₂O₃ and Ni-Y₂O₃ systems, the sinterability of the powders obtained once became worse with the milling time in the early stages of the milling, and thereafter it became better with the milling time. 2) The change in the sinterability of the powder corresponded to that in the loss of the matrix hardness due to sintering, in which the larger the loss of the matrix hardness was, the better the sinterability became. 3) The powder in Ni-A1₂O₃ system was superior in the sinterability to that in Ni-Y₂O₃ system in which the dispersoid in the matrix had more thermal stability and consequently the loss of the matrix hardness due to sintering was less than in Ni-Al₂O₃ system.