Three oxide features: the thin and smooth protective oxide, reactive element (Ti-, Zr-or Y-rich) particles, and patches of thick oxide surrounding the Y-rich reactive element particles, were observed on a commercial FeCrAlRE alloy, Kanthal AF, exposed at 900°C. The microstructural development of the patches of thick oxide was investigated on samples exposed for 24 or 168 h in either dry O 2 or O 2 ? 40% H 2 O. Analytical transmission electron microscopy in combination with site-precision TEM sample preparation by FIB/SEM was used. In all patches a thin but continuous inward growing a-Al 2 O 3 layer was formed under a thick outward growing alumina layer, which initially consisted only of c-Al 2 O 3 . In dry O 2 , transformation of c-Al 2 O 3 (in the outer layer) to a-Al 2 O 3 had started during 24 h and a considerable amount of c-Al 2 O 3 had transformed after 168 h. The transformation originated immediately above the inward growing a-Al 2 O 3 . No such transformation occurred in O 2 ? H 2 O. The possible effects of the Y-rich RE particles, as well as the effects of water vapour, on the oxidation were discussed.