An elemental powder mixture composed of 50at.% aluminium, 25at.% iron and 25at.% titanium added with 1wt.% ethanol was milled in a high energy planetary ball mill. The structural changes and the formation of new phases occurring in the material during mechanical alloying at various milling times were examined using X-ray diffractometry (XRD) and transmission electron microscopy (TEM). The XRD patterns show that, as a milling time increases, the Al peaks disappear gradually and all the Fe peaks became slightly shifted and broadened. These changes can be explained in terms of a b.c.c. Fe(AI) solid solution formation. It was also observed that the intensity of the Ti peaks decreased and new f.c.c. phase peaks appeared. When the milling time was not very long the f.c.c. phase was identified to be titanium hydrocarbide, whereas after the milling process was completed it was titanium carbide. The final product obtained in this experiment was a composite built of titanium carbide distributed in the Fe(AI) solid solution matrix. TEM observations have shown that after the longest milling time, the structure of the powder particles becomes nanocrystalline.