The oxidation behavior of a directionally solidified Ni-Al-Cr3C2 alloy of overall composition Ni-12.3Cr-6.9Al-1.8C (wt. %) has been investigated at 1100 and 1200 degrees C under I atm oxygen. Experiments have also been carried out on specimens having the same composition but with a nonaligned structure. At 1100 degrees C, in both cases and unlike conventional nickel-base superalloys with the same chromium and aluminum contents, aluminium was found to oxidize internally beneath an external Cr2O3 scale. Although the volume fraction of the internal precipitates was significant, they showed no tendency to coalesce into a compact subsurface layer, but formed randomly distributed clusters in the alloy matrix. The kinetics of oxidation and morphologies of the oxide scales were not substantially affected either by thermal cycling or by the alloy microstructure. At the higher temperature, continuous Al2O3 scales formed beneath thick layers of transient nickel and nickel-chromium-rich oxides; no internal precipitation of aluminum-rich oxides was observed. However, internal degradation of the directionally solidified specimens at 1200 degrees C was quite significant, due to in situ oxidation of primary carbides. The multilayered scales formed at 1200 degrees C spalled extensively on cooling as a consequence of loss of contact, starting preferentially at the intersections of the Cr3C2 fibers with the alloy-scale interface. The observed behavior can be attributed to a reduction in the availability of chromium because of the multiphase structure of the alloy; this, in turn, resulted in an increase in the flux of oxygen inward, leading to internal oxidation of aluminum at 1100 degrees C. The almost exclusive external oxidation of aluminum becomes possible at 1200 degrees C, probably because of an increase in the diffusivity of aluminum in the alloy matrix.