The mechanical alloying process has been used to prepare nanostructured Fe₃₁Co₃₁Nb₈B₃₀ (wt%) alloy from pure elemental powders in a high energy planetary ball-mill Retsch PM400. Microstructural changes, phase transformation and kinetics were studied by X-ray diffraction, differential scanning calorimetry and M?ssbauer spectrometry. The crystallite size reduction down the nanometer scale (~8 nm) is accompanied by the introduction of internal strains up to 1.8% (root-mean square strain, rms). Further milling time leads to the formation of partially paramagnetic amorphous structure in which bcc FeCo nanograins are embedded. The kinetics of amorphization during the milling process can be described by two regimes characterized by different values of the Avrami parameter n₁ = 1.41 and n₂ = 0.34. The excess enthalpy due to the high density of defects is released at temperatures below 300°C. The glass transition temperature increases with increasing milling time.