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Abstract First principles theory calculations have been conducted to investigate the helium cluster interaction with various oxygen-enriched local atomic structures in the iron matrix. The helium atom displays strong affinity to the oxygen:vacancy pair. The helium formation energy reduces with the tensile strain and increases with the compressive strain. The iron matrix is hardened under the compressive strain and softened under the tensile strain, regardless of the local atomic structures. Under zero strain condition, the iron matrix elasticity is not sensitive to the size of embedded helium cluster, due to the dual effects of the local strain field induced by the helium cluster. On one hand, the helium cluster induces softening effect due to the stretching of the local atomic structure. On the other hand, the helium cluster induces the hardening effect due to the compression of the surrounding iron matrix. [ABSTRACT FROM AUTHOR]