NiAl has attracted increasing attentions because of its promising potential as protective coating materials for high temperature oxidation resistance. In this paper, Dysprosium (Dy) doped NiAl alloys were produced by arc melting. Cyclic oxidation of the alloys was carried out at 1200°C. The effects of Dy as a reactive element on the microstructure and failure of alumina scales on NiAl were investigated. For the melted alloy, Dy was mainly precipitated along the grain boundary and some within the grains in the form of DyNi2Al3 phase. Compared to Al2O3 scale formed on the undoped NiAl alloy, the microstructure of the scale was greatly changed and the ridge-like Al2O3 scale became less distinct on Dy-doped NiAl. The equi-axed alumina scale grew on NiAl, whereas the columnar alumina developed on Dy doped NiAl. The Dy dopant prevented the oxide scale from rumpling and the formation of cavities beneath the oxide scale. Due to this, the oxide scale adhesion was significantly improved. For Dy-doped NiAl, the scale failure mostly occurred surrounding the oxide protrusions where were rich in Dy.