We report the mechanically activated aluminothermic reduction of NiO [NiO-Al(x wt.%) with x = 0, 20, 40] into NiO-Ni-Al 2 O 3 nanocomposites using high-energy planetary ball milling under dry milling and the resulting structural and magnetic properties. Structural studies reveal that both NiO and NiO-Al powders exhibit a face centered cubic structure with large crystal size reduction. However, the NiO-Al milled powders unveil the process of aluminothermic reaction kinetics, which changes from gradual reaction as a function of milling time for x = 20 powders to self-propagating combustion reaction for x = 40. This allows us to achieve a maximum NiO reduction of 40% and 90% for x = 20 and 40, respectively. The process of NiO reduction by Al is further confirmed through thermal studies. Pure NiO shows an antiferromagnetic (AFM) nature, which transforms into a ferromagnetic (FM) one with the moderate magnetization of about 1 emu g −1 with decreasing crystal size. The formation of FM Ni from AFM NiO matrix in milled NiO-Al powders could be precisely monitored by the change in the magnetization, which increases up to 4 emu g −1 and 28 emu g −1 for the gradual and combustion reactions, respectively. This results in a considerable exchange bias and its magnitude strongly depends on the relative fractions of NiO and Ni phases. Thermomagnetization data confirm the presence of mixed magnetic phases and the component of induced FM phase fades out due to the formation of Ni from the reduction of NiO. The changes in the structural and magnetic properties of milled NiO-Al powders are discussed on the basis of milling time-dependent mechanically activated reduction reaction of NiO into NiO-Ni-Al 2 O 3 nanocomposites. The process of mechanical activation on the aluminothermic reduction allows for a controlled reduction of NiO; thus, it is suitable for the applications in catalysis and the ore reduction process.