Exposure of the engine valve to high temperatures led to the degradation of the valve material due to microstructural instability and deteriorating mechanical properties. Performance enhancement and alteration in microstructures can be attained through the powder metallurgy route which is a viable method to produce near net shape components. In this current study, the development of austenitic stainless steel (21-4N) through the powder metallurgy route as an alternate material for engine valves was investigated. Mechanical alloying was carried out for the pre-alloyed mixtures and consolidated using vacuum hot pressing. Sintering parameters were fixed at 1200 °C, 50 MPa and at a vacuum level of 10-3 Torr. A scanning electron microscope was used to analyze the morphology of the milled powders. Densities for the hot pressed powders were compared with theoretical densities and found to be around 98–99%. Observations regarding grain size, the presence of austenitic grain, heterogeneous distribution of metal carbides and analysis of chemical composition along the metal matrix were determined using both optical and electron microscopes. X-ray diffraction was carried out for both the consolidated and powder samples. The hot pressed samples exhibited a hardness value of 410 ± 10 Hv. An isothermal compression test for the sintered samples was carried out at a temperature of 650 °C and strain rate of 0.001 s−1. It is showed that the compressive strength of 1380 MPa. An analysis between the room temperature yield strength obtained from hardness measurement and the strengthening mechanism based on the microstructure was conducted. Grain size, dislocation and solid solution are the major strengthening mechanisms which strengthen the material. Overall, the development of valve steel material through the powder metallurgy route exhibited improved metallurgical and mechanical properties in comparison to the corresponding cast product.