The deformation mechanism of a high‐purity Fe–50 mass% Cr alloy and a floating‐zone refined Fe–50 mass% Cr alloy was investigated by tensile testing between 873 and 1073 K and microstructural observation. It is concluded from the present experimental research that: 1. A stress‐drop appears after yielding in both alloys between 873 and 1073 K. The stress‐drop is the result of grain boundary sliding and is related to the formation of dislocation sources at the beginning of deformation. 2. Intergranular cracking occurs in the high‐purity Fe–50 mass% Cr alloy and also in the fine‐grained zone‐refined alloy and the cracking is strongly influenced by grain size. The mechanism is not grain boundary decohesion caused by segregated sulfur. 3. The stress‐drop is also observed in the Fe–50 mass% Cr–8 mass% W alloy, but grain boundary cracks are seldom observed in this alloy. 4. The deformation behavior after the stress‐drop is determined by a competition between increasing dislocation density and dislocation annihilation at high temperatures. No twinning is seen in this temperature range, not even in the W‐doped alloy.