Mechanical alloying technique was used to produce an intermetallic based composite powder. Mechanical activation of aluminum and nickel oxide powder mixture using a high energy ball mill resulted in a self-propagating high temperature synthesis through which nickel oxide was reduced by metallic aluminum and produced nickel aluminide and alumina composite powder. Effect of milling time on crystallite sizes of the product phases was investigated. The synthesized product was characterized by scanning electron microscope and X-ray diffraction. It was shown that increased milling time resulted in crystallite size reduction and peak broadening in XRD patterns. Calculation of the mean crystallite sizes of the product phases indicated that they are in nano scale. The results were further confirmed by transmission electron microscopy.