We report the first observation of reversible equilibrium crystalline–metastable crystalline phase transformation in mechanically alloyed Ni–Ge powder mixtures. The formation of the equilibrium NiGe and metastable NiGe2 phases was investigated using x-ray diffraction and scanning electron microscopy methods. It was clearly shown that milling of the blended elemental powders first resulted in the formation of the equilibrium NiGe phase and continued milling led to the formation of the metastable NiGe2 phase. However, on milling for a longer time, the metastable phase transformed back to the equilibrium NiGe phase. The formation mechanisms of the stable and metastable phases and the reversibility of the phase transformations have been explained on the basis of the thermodynamic stability of the different phases and the contribution of defect concentration and surface energy effects to the free energy of the milled powder.