The focus of this study is to improve the dispersion state of nanocrystalline (nc) Fe‐Ni particles in polyamide 6 (PA6) matrix and the filler‐matrix interfacial interactions to provide Fe‐Ni alloy/PA6 nanocomposites of remarkable mechanical performance for engineering applications. nc Fe40Ni60 particles were chemically synthesized. Then Fe40Ni60/PA6 nanocomposites of various nanofiller loading were prepared by compounding via a newly modified master batch technique called ultrasound assisted master batch (UMB), followed by injection molding (IM). Their mechanical properties, morphology and structural parameters were characterized and compared with the corresponding properties of Fe40Ni60/PA6 nanocomposites made by solution mixing (SM) and IM. The study reveals that the UMB process is more cost effective and time efficient, simpler and easier to scale up compared with the SM process. In addition, UMB nanocomposites exhibit superior mechanical properties and distinctive morphology compared with the corresponding SM ones. Moreover, structural analyses indicate that physical structural changes occurred in PA6 due to presence of alloy particles are affected differently by the different compounding methods, profound understanding of such phenomenon is focused throughout the article. These distinctive advantages recommend that UMB technique can be of great potential in commercial production of polymer nanocomposites (PNCs). It is concluded that the sonication of nc Fe40Ni60 particles in dilute polymer solution during UMB compounding, a new step that is incorporated for the first time in the master batch process, is mainly responsible for the good wetting between nanoparticles and polymer chains, strong filler‐matrix interactions and consequently the remarkable mechanical performance of UMB PNCs. POLYM. COMPOS., 35:2343–2352, 2014. © 2014 Society of Plastics Engineers