Nanostructured NiAl intermetallic coatings were produced on carbon steel by using mechanical alloying in ambient temperature and pressure. Ni and Al powders were mixed with the composition of Ni–50at.% Al. Coatings were examined using X-ray diffraction and scanning electron microscopy (SEM). Transmission electron microscopy (TEM) was also used to observe coating particles. Samples prepared after 480min ball milling were subjected to annealing treatment at temperatures range of 400°C to 600°C. Continued ball milling reduced the coarse grains of the coating to the nanoscale. The size of nanocrystalline grains in the Ni–Al coating ranged between 17nm and 96nm. The nanocrystalline grains had a tendency to grow with increasing annealing temperature. After annealing at 400°C, a solid state reaction between Al and Ni leads to the formation of new phases. With increasing annealing temperature to 600°C only NiAl peaks were observed on XRD pattern. After annealing the hardness of the coating initially decreased and then increased. Annealing treatment also improved wear resistance of the coating.