The worldwide growing demand for clean energy leads to necessity for new energy generation methods. Nuclear power generators are an excellent solution for these demands. The feasibility of nuclear power production depends on the performance of structural materials under the harsh conditions in nuclear reactors such as high radiation flux and high temperature. The development of structural materials to withstand such conditions is a big challenge and crucial for advanced nuclear fission and fusion reactors. Several materials are developed, amongst them Oxide Dispersion Strengthened (ODS) steels also called Nanostructured Ferritic Alloys (NFA). NFA consist of Fe-Cr based ferritic/martensitic steels that contain highly dispersed nanometer-size Y-Ti-O nanoclusters, and are manufactured via powder metallurgy. The presence of nanoclusters leads to high temperature stability and radiation resistance. Despite many research activities using advanced analytical techniques such as Transmission Electron Microscopy and Atom Probe Tomography as well as theoretical calculations many properties of the nanoclusters, such as the detailed atomic structure and composition as well as their efficiency for trapping He, vacancies and self-interstitial atoms (SIA), are still not completely understood. In the first part of this thesis work, six different structural models for atomic clusters in bcc Fe which may contain O, Y, Ti, and vacancies (v) are investigated by Density Functional Theory (DFT) calculations. Results for clusters with identical numbers of constituents (O, Y, Ti, and v) are compared. The most important finding consists in the statement that the data on the stability or energetics of the relaxed clusters are comparable although their atomic configurations are often different. This contradicts the prevailing opinion in the related theoretical literature that favors the so-called structure-matching model, which is also investigated in this work. In all studied cases, the absolute value of the total binding energy per cluster constituent becomes lower if Y is partially replaced by Ti, i.e. the driving force for the growth of O-Y clusters is higher than that of O-Y-Ti clusters. This may be correlated with the experimental observation that the presence of Ti leads to a reduction of the size of the oxide clusters in NFA and to a higher dispersion. A further major result is the finding that cage-like (CL) clusters and clusters with an oxygen atom in the center (cage) have a similar total binding energy. If Ti is not present such clusters are slightly more stable than the corresponding CL clusters. The opposite holds for clusters with Ti. It is also shown that adding O atoms to CL cluster leads to structures with O in the center. Vacancies are an important for the stabilization of the cluster due to the very strong binding with O. We infer that the Ov pair may be the origin for cluster nucleation growth. Because of limited computational resources, the dimension of clusters investigated by DFT is still below or close to the limit of the experimental resolution of methods allowing for a simultaneous determination of atomic structure and composition of the clusters. These small clusters may be considered as nuclei for further structural evolution and growth during which a selection of the most favored cluster structures could occur. In the second part of the work four different cluster structures are used to investigate their ability to trap irradiation defects He, v and SIA. These defects are inserted on different positions inside and in the environment of the clusters, the total energy of the corresponding supercell is minimized by DFT, and the binding and incorporation energy of the three kinds of defects is determined. He in the center of a CL cluster is more stable than on interfacial vacant sites (IVS). In CL O-Y clusters, He on an IVS is more stable than in clusters with oxygen in the center, whereas there is no significant difference between the two kinds for clusters with Ti. Up to a distance of 1.5 times the iron lattice constant from the cluster center He is not stable on most of the octahedral and tetrahedral interstitial sites in the Fe matrix. Instead, He is shifted towards positions closer to the cluster. Relaxation occurs to known IVS as well as to previously unknown interfacial interstitial sites (IIS). Moreover, two or three He atoms are placed on sites found to be stable after adding a single He. The corresponding binding and incorporation energies obtained after relaxation are nearly equal to the sum of the values for the interaction with a single He atom. However, placing He dimers or trimers in the environment of a vacancy that belongs to the cluster may also lead to relatively low values of the incorporation energy. Also, He jump barriers between interfacial sites and the center of CL clusters are determined. In the CL O-Y cluster, the barriers are lower than in the CL O-Y-Ti cluster, i.e. trapping and release of He is easier in the former than in the latter. The main reason for the high He trapping efficiency is the low electron density in the empty regions of the oxide-like structure of the clusters. Vacancy and SIA interaction with the clusters is also attractive. The binding energy of a vacancy strongly depends on the site where the vacancy is inserted while in all the studied cases the SIA is annihilated at the cluster-iron interface. Present results clearly demonstrate that the oxide-based nanoclusters are strong traps for irradiation-induced defects, which is in agreement with experimental findings.