The structure and magnetic properties of Fe-M (M = Zr, Hf, Co or Si) alloy powders produced by mechanical alloying (MA) of elemental powders or a mixture of elemental powders and alloy powders have been examined. The MA Fe-Zr and Fe-Hf powders have a non-equilibrium b.c.c. phase in the composition range above 90 at% Fe. The coercivity of the MA Fe-Zr and Fe-Hf powders exhibits a minimum value (1300 A m-1) combined with a high magnetization of 2.2×10-4 Wb m kg-1 at 95 at % Fe, which corresponds to the concentration of zero magnetostriction. Although the compacts made from the MA b.c.c. Fe-Zr powders do not exhibit good soft magnetic properties, the permeability of the compacts made from the MA Fe-Co powders annealed at 1173 K for 18 ks in H2 is nearly the same as that of the alloy ingot produced by conventional casting followed by the same annealing treatment.