In this study, we investigated the state of Y2O3, as a major additive element in Fe-based ODS alloys, during mechanical alloying (MA) processes by thermodynamic approaches and experimental verification. For this purpose, we introduced Ti2O3 that formed different reaction products depending on the state of Y2O3 into the Fe-based ODS alloys. In addition, the reaction products of Ti2O3, Y, and Y2O3 powders were predicted approximately based on their formation enthalpy. The experimental results relating to the formation of Y-based complex oxides revealed that YTiO3 and Y2Ti2O7 were formed when Ti2O3 reacted with Y; in contrast, only Y2Ti2O7 was detected during the reaction between Ti2O3 and Y2O3. In the alloy of Fe–Cr–Y2O3 with Ti2O3, YTiO3 (formed by the reaction of Ti2O3 with Y) was detected after the MA and heat treatment processes were complete, even though Y2O3 was present in the system. Using these results, it was proved that Y2O3 decomposed into monoatomic Y and O during the MA process.