Fe-Ni ultra-fine particles were prepared by mechanical alloying and phase transformation during mechanical alloying was studied. Results show that phase transformation tendency is different during mechanical alloying of Fe-Ni powders with different nickel content. Fe-64%Ni (INVAR) nanocrystalline powders of were prepared by mechanical by mechanical alloying from powder mixture of elemental Fe and Ni in a planetary ball mill Fritsch Pulverisette 7 in argon atmosphere. X-ray diffraction and Mössbauer spectroscopy were used to investigate structure and phase constitution of the samples. The as-milled samples contain only a single γ-fcc (phase) with an average crystallite size of the order of 14 nm, the average hyperfine field is about 31T.