This work deals with the enhancement of mechanical properties and oxidation resistance of a powder metallurgy (PM) Ni3Al alloy with chromium. The PM route involves atomization, milling of powders, consolidation by hot isostatic pressing at 1250degreesC and subsequent thermal treatment at 1235degreesC for 24 h. This processing route generates an intermetallic alloy with better mechanical properties than the same PM material made with non-milled particles. The microstructure of the material after processing consists of small alumina oxide particles, resulting from the milling stage, dispersed in an equiaxed Ni3Al matrix with Cr in solid solution. The alloy exhibits a high ultimate tensile strength up to 800degreesC, with values ranging from 1350 MPa at 200degreesC to 420 MPa at 800degreesC. Above 900degreesC, the material considerable softens. The alloy shows always elongations to failure higher than 2.5%, even in the interval of temperatures at which oxygen dynamic embrittlement has been reported at this interval. Results are compared with those obtained previously in this intermetallic made with non-milled powders. The alloy processed by the milling stage exhibits better mechanical properties, especially higher elongations to failure in the medium temperature range. The alloy shows excellent oxidation resistance for long-term exposures up to 900degreesC, arising from the rapid establishment of a healing alumina layer. Both the fine grain of the alloy and chromium additions promote the formation of this alumina layer. At 900degreesC, the scale is protective although some spalling of the external part of the alumina scale occurs.