Mechanical alloying (MA) is a powder metallurgy processing technique involving cold welding, fracturing and rewelding of powder particles in a high-energy ball mill. In the present study, the intermetallic matrix composites (IMCs) of Ni-Al reinforced by M7C3 were produced by powder metallurgical routes via solid state reaction of Ni, Al and M7C3 particulates by mechanical alloying processes. Ni, Al and M7C3 powders having 100 mu m were mixed, mechanical alloyed and the compacts were combusted in a furnace. The mechanically alloyed (MAed) powders were investigated by X-ray diffraction (XRD), microhardness measurement, optic microscopy (OM), scanning electron microscopy (SEM) and energy dispersive spectrometry (EDS). The presence of the carbides depressed the formation of unwanted NiAl intermetallic phases. The mechanical alloyed M7C3 particles were unstable and decomposed partially within the matrix during alloying and sintering, and the morphology of the composites changed with the dissolution ratio of M7C3 and sintering temperature.