The present article deals with the processing and microstructural evolution of powder metallurgy (PM) Zn-22Al pct eutectoid alloy. The powder material was produced through inert gas atomization and then cryomilled in liquid nitrogen. The milled powder particles were consolidated by hot isostatic pressing ("hipping") followed by thermomechanical treatment, resulting in a two-phase microstructure. The microstructures were characterized using scanning electron microscopy (SEM) and transmission electron microscopy (TEM). The principal processing factors and microstructural characteristics associated with the major processing steps, including spray atomization, mechanical milling (MM), consolidation, and heat treatment, were evaluated and discussed. Hot isostatic pressing and extrusion followed by heat treatment to produce the superplastic structure (Al-rich phase and Zn-rich phase) are effective in elimination porosity. A TEM examination of the microstructure of the alloy after processing reveals the presence of nanodispersion particles that are not uniformly distributed. The formation of the dispersions was attributed to the interaction between the powder material (primarily Al phase) and environmental elements such as oxygen and nitrogen during milling. Moreover, the size and distribution of the dispersions present in the bulk material met the anticipated requirements for serving as inhibitors for grain growth and barriers for dislocation movement. The TEM observations on crept specimens reveal extensive dislocation/dispersion interactions.