Fe-10wt% La (OH)3 composite powders have been fabricated by ball milling, under argon atmosphere for milling periods of 0, 5 and 10 h, respectively. Changes in structural, morphological, thermal and magnetic properties of the powders during mechanical alloying and during subsequent annealing have been examined by X-ray diffraction, scanning electron microscopy (SEM), differential scanning calorimetry (DSC) and vibrating sample magnetometer (VSM). XRD results: showed the formation of new phases (Fe and LaFeO3 perovskite) created through the ball milling. The results showed that the crystalline size of ball milled powders decreased with increasing the milling time. In fact, after 10 h of ball milling, La (OH)3 changes from nanostructure in amorphous structure. The magnetic measurements display a distinct saturation magnetization and coercivity.