Barium hexaferrite particles derived from sol-gel combustion method with a mean particle size of 160 nm and Fe particles with a mean particle size of 150 µm were mechanically alloyed using planetary ball mill. Phase constitution and EDS analysis of the products were investigated by XRD and SEM, respectively. Magnetic properties of samples were measured by VSM. Influence of the milling time and Fe content on the phase constitution of synthesized composites has been investigated. XRD results indicated that in sample with 90 and 50wt% Fe, the magnetic composite with enhanced magnetic properties, formed based on Fe phase while barium hexaferrite particles embedded within Fe particles. In sample with 90% Fe, the crystallite size of Fe reduced from 173 to 87 nm by increasing the milling time from 1 to 20 h; saturation magnetization of the 20 h milled sample was measured as 94.8 emu/g. Besides, in sample with 50wt% Fe, some FeO phase was detected which is probably due to the partial decomposition of hard magnetic phase during milling. Sample with 10wt% Fe showed completely different behavior and magnetite appeared as a major magnetic phase.