The effect of chromium on iron hardening via segregation on dislocation loops was studied by atomic scale computer modeling. A combination of Monte Carlo and molecular dynamics techniques together with the recently determined Fe–Cr interatomic potentials fitted to ab initio data was used to investigate Cr segregation on ½〈1 1 1〉 interstitial dislocation loops and its impact on the interaction with moving dislocations. The Monte Carlo results reveal that Cr atoms segregate to the loop tensile strain region and dissolve well above the temperature corresponding to the solubility limit. The molecular dynamics results demonstrated that local micro-chemical changes near the loop reduce its mobility and increase the strength. The stress to move a dislocation through the array of Cr “decorated” loops increases due to modification of the dislocation–loop interaction mechanism. A possible explanation for a number of experimental observations being dependent on the radiation dose and for Cr concentration effects on the yield stress is given on the basis of the modeling results.