PURPOSE: To improve the wear resistance of a sintered alloy by dispersing a shell-like hard phase of fine aluminum oxide enclosed by Ni into a martensitic matrix which has a specific composition and in which carbide precipitates are dispersed.

CONSTITUTION: An Fe-base sintered alloy is formed by dispersing 2-20vol.% of shell-like hard phase into shell-like state and composed essentially of fine aluminum oxide into a martensitic matrix which has a composition consisting of, by weight, 1-3% C, 0.3-1.5% Si, 2-8% Cr, 1-5% Mo, 0.4-3% V, and the balance Fe with inevitable impurities and in which carbide precipitates are dispersed. The average outside diameter of the aluminum oxide and average thickness are regulated to 5-25μm and 1-10μm, respectively, and the shell-like hard phase has a structure enclosed by Ni or Ni alloy. When this Fe-base sintered alloy is applied to the production, e.g. of vane member for rotary compressor, it can produce superior properties over a long period even if subjected to practical use under severe conditions.