The high-temperature oxidation behaviour of oxide dispersion strengthened FeCrAl (ODS-FeCrAl) alloys was studied at 1100 °C in dry and wet atmospheres for use as candidate accident-tolerant fuel (ATF) cladding materials. Electron backscatter diffraction (EBSD), transmission electron microscopy (TEM), scanning electron microscopy (SEM) and X-ray diffraction (XRD) were used to analyze qualitatively and quantitatively the oxides microstructure of oxidized ODS-FeCrAl alloys. The oxidation rate of ODS-FeCrAl alloys in dry atmosphere was lower than that in wet atmosphere. The amount of nodular oxides were rich in Y, Zr, and Ti at the gas/scale interface in dry atmosphere was significantly larger than that in wet atmosphere. In addition, the grains size of columnar alumina formed on the alloy surface in dry atmosphere was larger than that in wet atmosphere. A mechanism of water vapour increasing the oxidation rate of ODS-FeCrAl alloys was well proposed.