Electrolytically deposited nanocrystalline Ni-45%Fe alloys, composed of γ (f.c.c.) phase, were annealed at 573 and 673 K for time periods up to 20 h in an inert atmosphere of argon. The evolutions of crystallographic texture, grain size, and microhardness were analyzed as a function of annealing parameters. The initial grains, approximately 5 nm in size increased after annealing up to 10–20 nm, however, the growth kinetics and the final grain size depended on the temperature. A correlation was found between the grain size and alloy microhardness. The phase composition was unstable and during annealing the α(b.c.c) phase was detected to precipitate from the γ matrix. The texture of γ phase, consisted of two fibre components of <111> and <200>, and evolved at high temperatures. Although the detailed changes depended on the annealing temperature, in general, the <111> component became stronger at the expense of the <200> component.