A new method to fabricate the fine magnetic abrasives by using mechanical alloying is proposed. The mechanical alloying process is a solid powder process where the powder particles are subjected to high energetic impact by the balls in a vial. As the powder particles in the vial are continuously impacted by the balls, cold welding between particles and fracturing of the particles take place repeatedly during the ball milling process using a planetary mill. After the manufacturing process, fine magnetic abrasives which the guest abrasive particles clung to the base metal matrix without bonding material can be obtained. The shape of the newly fabricated fine magnetic abrasives was investigated using SEM and its polishing performance was verified by experiment. It is very helpful to finishing the micro structures such as injection mold and MEMS applications in final polishing stage. The areal rms surface roughness of the workpiece after several polishing processes has decreased to a few nanometer scales.