Fabrication of Fe3AlC matrix in-situ composite, reinforced by a FeAl phase, was studied by using the powder metallurgical processing route. Especially, in order to disperse the second phase more finely, we chose the mechanical alloying process. We investigated the microstructural and mechanical properties of the consolidated material. After consolidation by vacuum hot pressing, the compact showed almost full density and consisted of a Fe3AlC matrix and FeAl second phase (average particle size was less than 1μm). The compact showed HV746, which was higher than that of the arc melted Fe3AlC monolithic material, HV650.