PURPOSE: To provide the sintered alloy steel with a long tool service life by forming a hard phase of TiN short fiber having specified dimension, forming a bonding phase of an alloy steel contg. specified wt.% of Cr, Mo, W, Co, C, Mn and Si and specifying the ratios of both phases.

CONSTITUTION: The sintered alloy steel is formed of a hard phase of TiN short fiber and a bonding phase of an alloy steel. The diameter of the short fiber is regulated to 0.01 to 0.1μm, its length to 0.1 to 0.5μm and the ratio of length/diameter to 5 to 50. The compsn. of the alloy steel is regulated to the one contg., by weight, 2.5 to 4.5% Cr, 1.5 to 5% Mo, 2 to 6% W, 1.5 to 15% Co, 0.3 to 1.2% C, ≤0.5% Mn, ≤0.5% Si and the balance Fe with inevitable impurities. Then, the ratio of the hard phase is regulated to 15 to 70vol.% to the whole and the ratio of the bonding phase to 30 to 80vol.%. In this way, its wear resistance can be improved to the level equivalent to that of a sintered hard alloy.