Mechanical alloying process of 6.5 wt. % Si-Fe powder mixtures has been studied using X-ray diffraction, DSC and vibrating sample magnetometer. The alloying process is divided into three stages. In the first stage, Curie temperature (Tc) is the same as that of pure Fe, indicating that the particles are not alloyed yet. In the second stage, both a large calorific value and a large coercive force (Hc) are observed; Tc is not clearly observed. These results indicates that the particles have fine lamellar structure and contain large internal stress. In the third stage, the calorific value decreases and Hc decreases. At the same time, lower Tc is observed. These results indicate the uniformity of the powders have increased.