The effect of graphite addition on the high‐energy ball‐milling behavior of zirconium diboride (ZrB2) powder is investigated. It is shown that, regardless of presence or absence of graphite during ball milling, comminution occurs by repeated brittle fracture followed by cold‐welding, thereby resulting in the formation of agglomerates comprising primary particles of 10 nm in average diameter. However, addition of 2 wt% graphite leads to the formation of nanometer agglomerates (∼50 nm) rather than the submicrometer counterparts (∼120 nm) formed in the absence of graphite. The simultaneous attainment of reduced agglomerate size and homogeneous graphite dispersion at the nanometer scale can have important implications for the ultra‐high‐temperature ceramics community because of the expected twofold enhancement in the sintering kinetics of the compacts made from these nanoscale ZrB2 powders and the simplification of the processing routine.