The oxidation behaviour of binary Fe-Cr alloys containing 10 and 20 mass % Cr, respectively, was studied in Ar-20%O2, Ar-7%H2O and in Ar-4%H2-7%H2O at temperatures between 800 and 1050°C. Thermogravimetric analyses in combination with analytical studies using SEM/EDX and Raman Spectroscopy revealed, that in atmospheres in which water vapor is the source of oxygen, Cr exhibits a higher tendency to become internally oxidized than in the Ar-O2 gas. Contrary to previous studies which showed the presence of water vapor to affect transport processes in the surface oxide scale, the present results reveal that the presence of water vapor also affects the transport processes in the alloy. The enhanced internal oxidation, which is likely the result of water vapor increasing the solubility and/or the diffusivity of oxygen in the alloy, explains the frequently observed effect that Fe(Ni)Cr alloys with intermediate Cr contents (e.g. 10-20%, depending on temperature) exhibit protective oxidation in dry gases but breakaway type oxidation in steam. The temperature dependence of the change from protective to non-protective behaviour in Ar-H2O differs quantitatively, but not qualitatively from that in Ar-O2.