Molybdenum disiliside is known as a ceramic material with attractive properties for high temperature structural applications. In this study, mechanical alloying was used to produce MoSi2 powder directly from molybdenum oxide. Mixture of MoO3 and Si powders with commercial purity were exposed to high mechanical activation in a planetary ball mill. The ball to powder mass ratio was selected to be constant at 33:1 and the rotation speed (cup speed) was 600 rpm during the milling operations. Crystallite sizes and structural evolutions during milling were investigated by Xray diffraction analysis. The morphology of the mechanically alloyed powders was evaluated with scanning electron microscope (SEM). From XRD results, it was observed that within 6 hours of milling MoO3 was reduced and fully converted to MoO2. After 17 hours of milling MoO2 also began to reduce and peaks of MoSi2 (both and phases) and Mo were detected. Further milling resulted in a gradual decrease in MoO2 peak intensities because of its continuous reduction. Peaks of MoO2 were also broadened due to refinement of MoO2 crystallite sizes. Scherrer and Williamson-Hall methods using XRD patterns were employed to calculate the mean crystallite size. Calculations indicated that in the sample ball milled for 50 hours, MoSi2 crystallite sizes were less than 100 nm.