Alumina dispersion-strengthened 316L stainless steels were successfully produced using attrition milling and spark plasma sintering. Two different composites (316L/0.33 wt% and 316L/1 wt% Al2O3) were prepared by powder technology. The attrition milling produced a significant morphological transformation of the globular 316L starting powders and provided a homogeneous distribution of the nanosized alumina particles. The XRD results confirmed that the 316L steel was an austenitic γ-Fe3Ni2. The formation of a ferrite α-Fe phase was detected after milling; this was transformed to the austenitic γ-Fe3Ni2 after the sintering process. The addition of nanosized alumina particles increased the composites’ microhardness significantly to 2.25 GPa HV. With higher amounts of alumina, the nanosized particles tended to agglomerate during the milling process. The friction coefficient (FC) of the 316L/0.33 wt% Al2O3 and the 316L/1 wt% Al2O3 decreased because of the increase in the composite’s hardness; FC values of 0.96, 0.93 and 0.85, respectively, were measured respectively for the 316L reference, the 316L/0.33 wt% and the 316L/1 wt% Al2O3. The 316L/0.33 wt% Al2O3 composite had a higher flexural strength of 630.4 MPa compared with the 316L/1 wt% Al2O3 with 386.6 MPa; the lower value of the latter was related the agglomeration of the alumina powder during attrition milling.