The particle size effect on the peritectic melting of FeSn2 particles in FeSn-FeSn2 nanocomposites was studied using differential scanning calorimetry and X-ray diffraction. FeSn-10 wt.% FeSn2 compounds, mechanically milled for 30 min and slowly heated in a differential scanning calorimeter, showed incongruent melting at 680 K. Although FeSn2 grains grew from 10 to 40 nm upon heating before peritectic melting set in, the melting temperature was more than 100 K lower than the equilibrium value. A small latent heat during peritectic melting and a large amount of interfacial energy of FeSn-FeSn2 nanocomposites are held responsible for this large particle size effect. Grain growth is hardly possible in the case of rapid local heating during mechanical milling. Therefore, a decrease in the peritectic melting temperature is even expected to be substantially larger.