In order to clarify the mechanism of the so-called intermediate temperature embrittlement, CuGeO2 dispersion-hardened alloys were tensile tested at various temperatures between room temperature and 900 K with the strain rate of 10-3 s-1 or 10-4S-1. In the case of single crystals, elongation to fracture increased monotonically with increase in temperature. On the other hand, the ductility of polycrystals first decreased and then increased again, showing the ductility minimum associated with intergranular fracture at an intermediate temperature range around 600 K. The degree of such intermediate temperature embrittlement was sensitive to both the strain rate and the size of GeO2 particles at grain boundaries. Microscopic observation of deformation and fracture characteristics of polycrystalline samples indicated that the initial decrease of ductility occurred concurrently with the occurrence of grain-boundary sliding and that the recovery of ductility at higher temperatures was due to the initiation of extensive recrystallization. It is concluded that in the intermediate temperature range local stress which concentrates near the GeO2 particles on the sliding grain-boundary induces the formation of voids which eventually grow and coalesce to cause intergranular fracture. At higher temperatures, the stress concentration is relaxed by the recrystallization, resulting in the recovery of ductility. The effects of strain rate and particle size on the intermediate temperature embrittlement are also discussed in association with the occurrence and disappearance of the stress concentration.