Precipitation behavior of sigma (σ) phase of a Ni-Fe based alloy, considered as boiler materials in advanced ultra-supercritical (A-USC) coal-fired power plants, was investigated during thermal exposure at 650–800 °C for up to 40000 h with and without applied stress. Moreover, its influence on mechanical properties was clarified. During thermal exposure without applied stress, the plate-like σ phase precipitates directly in the grain, enriches in Ni, Fe, Cr and Mo and has tetragonal structure. Stress promotes the precipitation of σ phase. The incubation stage, rapid growth stage and near-equilibrium can be clearly distinguished during the precipitation process. At the incubation stage, the most visible change is the increase of σ density, but a pronounced increase appears regarding the density and size of σ phase at the rapid growth stage. The incubation and rapid growth stages of σ phase are controlled by interface and the preferential growth is in two directions, but it is related to diffusional-controlled growth at near-equilibrium stage. σ phase slightly reduces the tensile strength because of the crack initiation at γ/σ interface, but has no obvious influence on ductility. σ phase drastically decreases stress rupture life, but improve ductility by depleting strengthening elements in γ matrix.