The mechanical alloying of ZrAl binary system has been studied under different milling temperatures. X-ray diffraction, high-resolution transmission electron microscopy (HRTEM) and differential scanning calorimetry (DSC) have been utilized to investigate the average grain size, atomic strain, microstructure and thermal stability of the ball-milled samples. Our experiments reveal that the ultimate grain size of nanostructured materials prepared by ball milling is determined by two main factors: one is the density of structural defects and another is the chemical composition. The grain size of a nanocrystalline supersaturated solid solution is stable under heat treatment until reaching the temperature where crystallization of an equilibrium compound phase occurs. The experimental results also suggest that the steady state obtained by ball milling at 300°C is determined by the metastable equilibrium of two phases, but the steady state reached by milling at room temperature is more homogeneous in chemistry.