Binary mixtures of Fe-Cu powders in the range of 10–95 at.% Fe have been prepared by mechanical alloying and investigated by x-ray diffraction, differential scanning calorimetry (DSC), and transmission electron microscopy (TEM). The final grain sizes of the powders vary between 6 and 20 nm, and depend on the composition of the material. Indications for the formation of single-phase alloys with up to 60 at.% Fe in Cu and 20 at.% Cu in Fe have been found although the Fe-Cu system exhibits only vanishingly small solid solubilities under equilibrium conditions. Between 60 at.% and 80 at.% Fe a two-phase region of fee and bec solid solutions exists. Alloy formation is discussed with respect to the thermodynamic conditions of the material. The influence of the large grain boundary fraction, as well as the role of internal strains and stored enthalpies introduced by ball milling, is critically assessed.