High energy ball milling has been used to produce nanocrystalline Y1Ba2Cu3O7-δ powders. These powders are being used as starting materials for manufacturing superconducting textured wires by a solid state recrystallization process. Magnetic and microstructural characterizations were performed as a function of milling time. The milling reduces the average crystal size and creates low and high-angle grain boundaries which increase the granularity of the superconductor. As a result, the long-range order on the oxygen sublattice and on the yttrium and barium sites is destroyed. A transition from orthorhombic to tetragonal and finally to a cubic metastable phase is observed. Total loss of superconductivity occurs after about 1 h of milling. Prior to this time, superconductivity can partially be restored by room-temperature aging. High-temperature heat treatment of the nanocrystalline phase produces a tetragonal structure with c = 3a.