Isotropic nanocrystalline heterogeneous magnetic powders of MnO+FeCo were obtained by mechanical alloying in normal atmosphere from high-purity Mn, Fe and Co elements. After 120h of milling, the material consists of micrometric particles with exchange-coupled nanocrystalline grains of MnO, α-Fe 40Co60 and minoritily non-magnetic γ-Fe as determined by X-ray diffraction and Mössbauer spectroscopy. The hysteresis loop obtained by VSM in the as-milled powder showed exchange-bias phenomena when the temperature of the sample is smaller than the Néel temperature of the MnO, approximately 120K. The as-milled powders were cold pressed and annealed at 700K for different times in vacuum. Although the exchange-bias field is smaller in the annealed materials, samples with times of annealing below 3h show a noticeable improvement of the coercivity, even to room temperature. The mechanism for this coercivity enhancement effect can be linked to the substantially high anisotropy field produced by the unidirectional anisotropy, and the favorable fine nanostructure originated during the ball milling, that produces an efficient isolation of the ferromagnetic grains. © 2004 Elsevier B.V. All rights reserved.