Co-milling of various carbamazepine (CBZ) polymorphic forms (form I, III and dihydate) with nicotinamide (NIC) was performed in this study to investigate the formation kinetics of carbamazepine−nicotinamide cocrystals (CBZ−NIC) and to evaluate their physical stability. Milling was carried out at room temperature using an oscillatory ball mill at a 1:1 molar ratio of CBZ and NIC for various times up to 60 min. A freshly prepared sample was used for each milling. In the stability study, the milled samples (4, 10, 15, and 30 min) were stored under four conditions (20 and 40 °C; 33 and 75%RH) for up to four weeks. Samples were analyzed by X-ray powder diffraction (XRPD) and differential scanning calorimetry. XRPD showed that all CBZ forms used in this study formed cocrystals when co-milled with NIC (characteristic XRPD peaks at 6.6, 8.9, 10.1, 20.4, and 26.5 °2θ). Cocrystal formation was qualitatively found to be fastest for CBZ dihydrate (CBZ DH, ∼1 min), followed by CBZ form I (∼6 min), and CBZ form III (∼15 min). Upon storage, cocrystals formed from CBZ DH were found to be physically stable under all conditions studied, regardless of a small amount of impurity. For the two anhydrous forms (CBZ I and III), the physical stability of the co-milled CBZ−NIC samples was dependent on the duration of milling, the relative humidity, and temperature of the storage conditions. Under “mild” storage conditions (i.e., 20 °C/33%RH), either partially or fully formed CBZ−NIC cocrystals were found to revert back to pure CBZ and NIC. Under “moderate” storage conditions (i.e., 20 °C/75%RH and 40 °C/33%RH), CBZ−NIC cocrystals reverting to pure CBZ and NIC would occur initially, followed by cocrystal formation with increasing storage time. On the other hand, “stress” storage conditions (i.e., 40 °C/75%RH) were found to be ideal for cocrystal formation and stability. Moisture has been found to favor cocrystallization. Water molecules appear to have a significant effect on the formation (water molecules from CBZ DH) and the stability (high humidity) of the CBZ−NIC cocrystal. The “purity” of the cocrystal samples (i.e., presence of CBZ and/or NIC seeds) can affect the physical stability of CBZ−NIC cocrystals prepared by mechanical activation.