The processes of crack propagation in the La2O3-dispersed-strengthened molybdenum alloy were studied by in situ observation of transmission electron microscope. The results show that the paths of crack propagation in the alloy are dependent on the grain size of the molybdenum matrix and the shape and size of La2O3 particles. The crack propagates along the grain boundary of the matrix when it meets very fine molybdenum particles; the crack directly passes through the La2O3 particles to propagate when it meets micron-sized coarse rod-shaped La2O3 particles; the crack detours the particles and deflects when it meets sub-micron-sized ellipsoid-shaped La2O3 particles; the crack is pinned and then goes on propagating in zigzag or by bridging when it meets the nanosized fine and spherical La2O3 particles. Based on these experimental results, the mechanism of fine-grain toughening and particle-toughening of La2O3-dispersed- strengthened molybdenum were discussed from the aspect of the crack propagation paths and energy dissipation.