Abstract: It was studied that the mechanical alloying process of Fe and Ni powders under the protection of argon atmosphere. XRD and SEM were used to study the microstructure of powder during ballmilling process and the microhardness of powder for different ball milling times was measured. The results showed that complete alloying would be achieved after ball millins for 3 hours. The structure ofalloy was two-phases mixed structure of nanocrystulline supersaturated α solid solution(bcc) and γ solidsolution (fcc). After futher ball milling, the supersaturated a phase will be decomposed and transformed into γ phase gradually. The influence of micro-strain and grain size on the microhardness ofpowder during ball milling process has been analysized according to XRD patterns.