Reactive high energy ball-milling has known a growing interest from both fundamental and applied point of view. We focus here on the specific system Fe-Y2O3 metal-oxide nanocomposite because of its potential application to the synthesis of oxide dispersion strengthened steels, which are promising materials for nuclear applications. YFe3 and Fe2O3 were ball-milled during different milling durations in the stoichiometric proportions defined by the chemical reaction 2 YFe3 + Fe2O3 → 8 Fe + Y2O3. The obtained milled powder was characterized by XRD, SEM, TEM and their thermal behaviour was investigated by DTA. Through those characterizations, a Mechanically induced Self-propagating Reaction (MSR) was observed and several steps in the ball-milling process were identified: mixing of reactants, chemical reaction propagation, amorphization and refinement of the microstructure. The role of the milling intensity was also examined.