Microstructure evolution in Fe - O steels under mechanical milling followed by consolidating rolling was studied. The final microstructure that developed after consolidation was shown to depend on the volume fraction of the dispersed oxides. In the samples milled for 100 hours, the average grain size decreased from 0.7 to 0.2 mum with increase in the amount of oxygen from 0.2 to 1.5 mass%. The milling time had a similar effect on the final microstructure. The relatively short milling time of 20 hours resulted in the evolution of relatively coarse elongated grains with a large fraction of low-angle subgrain boundaries. In contrast, fine equiaxed grains (about 0.2 mum in size) with a near random boundary misorienations developed in the Fe - 0.6%O sample that was milled for 300 hours. The structural changes taking place under mechanical milling followed by consolidating rolling and the effect of dispersed oxides on final microstructures are discussed in some detail.