This work investigated the microstructure evolution and cryomilling mechanism of Sm2Fe17 alloy powders by means of XRD, ﬁeld emission scan electron microscopy (FESEM), high-resolution transmission electron microscopy (HRTEM), etc. The results showed that the average size of Sm-Fe alloy powders slightly increased after rapid decrease, and then decreased to a steady-equilibrium. The mean grain size of the alloy was reduced to less than 15 nm after 2 h of cryomilling. Typical brittle intergranular and cleavage fracture was found on the fracture of the alloy powders. After cryomilling for 9h, the nitrogen content in the alloy powders via a synchronous nitride action reached 1.23 wt.%. Furthermore, the nitrogen content after nitriding reached 2.85 wt%. But the magnetic properties of the alloy powders were not as good as expected. More detailed studies, including the cryomilling and nitriding processes of the alloy powders, are currently underway.