Nanocrystalline (W, Ni, Fe, La) composite powders were prepared by a multi-step process, consisting of sol-spray drying, calcination and subsequent hydrogen reduction process. The mechanism of the influence of La on grain growth and bubbling inhabitation during the liquid-phase sintering of the nanocrystalline (W, Ni, Fe, La) composite powders were studied. The phase transformation involved with La during the sintering of the composite powders was investigated. The distribution and existing form of La in the alloy were studied. The results show that the La2WO6 and La4W2O15 are formed in the synthesized nanocrystalline powders. In the sintered alloy, the rare-earth La is dispersed in the γ-(Ni, Fe) phase and converts into the La4W2O15 phase which can be stable at a high temperature. The La4W2O15 phase has a strong affinity with the impurities of Ca and O elements, playing the roles in purifying the grain boundaries and intracrystalline. The diffusion of W into the γ-(Ni, Fe) phase during liquid-phase sintering is inhibited and thus the solution of W in γ-(Ni, Fe) phase is significantly reduced by the second-phase particles, which slows down the solution-precipitation process and inhibits the grain growth as well as bubbling during liquid-phase sintering process.