X-ray diffraction, transmission electron microscopy, and differential scanning calorimetry were used to study the thermal stability of highly supersaturated nanocrystalline FexCu100−x alloys (10≤x≤95) synthesized by mechanical alloying. Alloys with x<60 exhibit single-phase fcc structure while single-phase bcc alloys form for x≳80. For 60≤x≤80 fcc and bcc phases coexist. Heating to elevated temperatures leads to structural relaxation, phase separation, and grain growth of the metastable nanocrystalline solid solutions. Single-phase fcc and bcc alloys undergo significant strain release but no appreciable grain growth prior to phase separation. After phase separation pronounced grain growth sets in. In contrast, samples in the two-phase region show some grain growth and significant chemical redistribution even at low temperatures. The phase separation of single-phase fcc and bcc alloys proceeds via different mechanisms: fcc solid solutions decompose by forming small Fe precipitates, while demixing in bcc alloys starts by segregation of Cu atoms to bcc grain boundaries before nucleation of Cu precipitates. These results show that the stability and grain growth behavior of nanocrystalline alloys is strongly affected by the microstructure of the material.