'Chromium-Molybdenum' ferritic steels are the most popular materials for construction of steam generators. Microstructure of 'Cr-Mo' steels is highly susceptible to changes due to heat-treatments. This susceptibility is often exploited for improving creep strength of these alloys, via suitable heat treatments, that are employed in order to incorporate changes in grain size and secondary precipitates. This paper presents a general overview of the role of microstructure in various aspects of gaseous oxidation, and the synergistic role of the alloy microstructure and oxidation in deterioration of mechanical properties. In the light of this overview, the paper also presents oxidation kinetics and oxidation-assisted microstructural degradation in the microstructurally different regions of weldments of a common variety of 'Cr-Mo' steel, viz., 2.25Cr-1Mo steel.