Abstract: Inconel 783 ingot casting alloy was treated by diffusion annealing, then hot forged and treated by solution and aging treatment. The effects of diffusion annealing on the final microstructure (mainly precipitates) and mechanical properties of the alloy were analyzed. The results show that the band-shaped or dendrite-like β phase with relatively large sizes at grain boundaries and large block-like Nb-carbides were formed in the final microstructures of the alloy without diffusion annealing, while the precipitates in the alloy with diffusion annealing were composed of fine and dispersed γ′ phase, granular β phase and short rod-like grain boundary β phase. Comparing to the alloy without diffusion annealing, the yield and ultimate tensile strength of the alloy with diffusion annealing increased by about 100 MPa and the elongation by about 30%; the tensile strength at 650 ℃ increased significantly and the ductility was improved by more than one time, which were mainly attributed to the uniformly dispersed fine precipitates in the microstructures by the diffusion annealing treatment.