A model of the two‐phase structure of a metal is proposed to explain the experimentally deduced decrease of the Curie temperature and saturation magnetization in submicron‐grained nickel. One of the phases is the grain body phase which has a Curie temperature traditional for the given crystalline material. The other is the grain boundary phase the Curie temperature of which is much lower. When the specimen temperture rises, the grain body phase is transformed into the grain boundary phase, i.e. due to this transformation the submicron‐grained Ni specimen goes over into the nonferromagnetic state at a temperature lower than the Curie temperature of crystalline Ni.

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