Mechanical alloying is applied to prepare Sm₂Fe₁₇N_x permanent magnet. Starting from elemental powders, the formation of hard magnetic phase of Sm₂Fe₁₇N_x by milling in a horizontal ball mill and a successive solid-state reaction was studied. The effect of starting composition of powder on product phase was first investigated. At as milled condition powder was found to consist of α-Fe and Sm-Fe alloy amorphous phases when Sm content is less than 19 at% and consist of α-Fe and SmFe₂ phase when Sm content is 26 at%. After heating and nitriding treatments pow-der was found to consist of α-Fe and Sm₂Fe₁₇N_x when Sm content is less than 15 at% and consist of α-Fe and SmN when the Sm content is 26 at%. When Sm content was 19 at%, nitrided MA powder consists of mostly Sm₂Fe₁₇N_x phase. The effect of milling time was studied for the powder of starting composition of Sm₁₉Fe₈₁. When powder was milled longer than 180ks, almost single phase of Sm₂Fe₁₇N_x was formed after nitriding. Coercivity was observed to increase linearly with logarithm of milling time from around 72ks and reached to 1200kA/m after 360ks of milling. This high value of coercivity was cosidered to be obtained by ultra fine grain size of Sm₂Fe₁₇N_x produced by ball milling and heat treatment.