Co- and Fe-based alloys produced by powder technology are being widely used as a matrix for diamond-containing composites in cutting, drilling, grinding pplications, etc. The severe service conditions demand that the mechanical and tribological properties of these alloys be improved. Development of metal-matrix composites (MMCs) and alloys reinforced with nanoparticles is a promising way to resolve this problem. In this work, we have investigated the effect of nano-sized WC, ZrO2, Al2O3, and Si3N4 additives on the properties of sintered dispersion-strengthened Co- and Fe-based MMCs. The results show an increase in the hardness (up to 10 HRB), bending strength (up to 50%), wear resistance (by a factor of 2–10) and a decrease in the friction coefficient (up to 4-fold) of the dispersion-strengthened materials. The use of designed alloys as a binder of cutting diamond tools gave a 4-fold increment in the service life, without reduction in their cutting speed.