MoNb-modified FeCrAl ferritic stainless steel (C35MN: Fe-13Cr-4.5Al-2Mo-1Nb, mass fraction, %) exhibits excellent comprehensive properties, including oxidation and corrosion resistance, as well as moderate mechanical properties, machinability, and neutron irradiation-resistance, making them potential accident-tolerant fuel (ATF) cladding materials for pressurized water reactors. However, the microstructural evolution and corresponding mechanical properties of C35MN alloys at the loss-of-coolant accident temperature have not been systematically studied. Herein, the microstructural evolution and mechanical properties of C35MN alloys during 400 h aging at 800^oC and 1 h annealing at 1000-1200^oC were systematically investigated. The alloy ingots were prepared by vacuum induction melting and cast into round bars, followed by 1150^oC hot-forging, 800^oC hot-rolling, and aging at 800^oC for 400 h. The samples annealed at 1000-1200^oC for 1 h were preaged at 800^oC for 24 h. The C35MN alloy exhibited excellent microstructural stability at 800 and 1000^oC, which is attributed to the precipitation of the Laves phase. The alloy showed a good combination of strength and ductility. However, when the annealing temperature increased above 1100^oC, a large amount of the Laves phase dissolved into the ferritic matrix, resulting in the coarsening of the matrix grains. Annealing above 1200^oC for 1 h, the grain size increased to 310 μm, severely degrading the mechanical property of the C35MN alloy below the requirement of ATF cladding materials. The microstructural stability of the C35MN alloy was influenced by the thermal stability of the Laves phase, which depends on the composition of the phase. The thermal stability of the Laves phase depends on the solid solubility of Laves phase forming elements in the ferritic matrix: the lower the solid solubility, the higher thermal stability of the Laves phase. The mechanical properties of C35MN were significantly affected by the grain size. The alloy exhibited ductile fracture when the grain size was less than 50 μm and brittle cleavage fracture when the grain size was above 130 μm.