The mechanical alloying process has been used to synthesise the nanocrystalline Fe60Al35Mg5 ( wt % )powders in a high energy planetary ball-mill Retsch PM 400. The evolution structural, microstructural and magnetic properties of ball-milled powders at different milling times (t variation from 0 to 32 h) were investigated by X-ray diffraction using the MAUD program which is based on the Rietveld method and the vibrating sample magnetometer (VSM). The XRD results reveal the formation of a bcc-Fe (Al, Mg) solid solution after 8 h of milling possessing a lattice parameter of 0,2895nm after 32 h of milling. It is also observed a refinement of the grain size which reaches 18,75 nm, and an increase in the microstrain after 32 hours of milling. Magnetic measurements of the milled Fe60Al35Mg5 ( wt % ) powder mixture exhibit a soft ferromagnetic character where the magnetic parameters are found to be very sensitive to the milling time mainly due to the particle size refinement as well as the formation of the solid solutions.