Powders of an Fe-50%V alloy were mechanically milled by steel balls in a steel vial under an Ar atmosphere. The mechanical attrition yielded nano-size crystallites with an average grain size of 9 nm after the 180h milling. The grain size decreased exponentially with milling time, accompanied by a rapid increase in the Fe content in Mo by 40%Fe. Mossbauer effect measurements suggest that the Fe atoms mixed from the milling vial and ball are nearly randomly distributed in the powders. The refinement of the grain size under 20 nm resulted in a decrease of the ferromagnetic Fe in amount, which led to an increase in the nearly paramagnetic Fe components at room temperature.