W–Y2O3 alloy with low DBTT (ductile-brittle transition temperature) and high RCT (recrystallization temperature), processed by high energy rate forging (HERF) was exposed to ITER-like steady-state and transient hydrogen plasma in the linear plasma generator Magnum-PSI. The steady-state heat fluxes were in the range of 8.35–16.32 MW·m−2, resulting in surface base temperatures of the samples in the range of 1271 °C to 1982 °C. The applied transient peak heat flux with a frequency of 5 Hz (a total of 1000 pulses) was about 0.50 GW·m−2. The exposure time was ~220 s. No obvious morphological change of the exposed sample with a base temperature of 1271 °C was observed, except the preferential erosion of the W/Y2O3 interface. However, cracks along grain boundaries were formed on the surface of the exposed samples with base temperatures above 1389 °C. Pronounced recrystallization and grain growth also occurred for the samples with base temperatures of 1666 °C and 1982 °C. It is desirable to find that no wide and deep crack with preferential propagation direction with regard to the sample dimension was observed, even extensive recrystallization and cracking along grain boundaries occurred. This indicates that decreasing DBTT and increasing RCT simultaneously is desirable to broaden the safe operational temperature window of W as plasma-facing material, and therefore to increase the power handling capability of the plasma-facing units of a tungsten-based divertor in future fusion reactors. However, the formation of W/Y2O3 composite, melting and depletion of the Y2O3 particles gradually occurred with increasing the surface temperatures. It implies that the doping of Y2O3 particles complicates the plasma-material interaction, compared to the pure W case. For example, it raises concerns about the formation of complex dust which will potentially be a significant issue for the safe operation of future fusion reactors (e.g. core plasma contamination and fuel recycling).