Al-based binary (Al–Mg) and ternary (Al–Mg–Zr) elemental powder mixtures were mechanically alloyed to develop new Al–Mg–Zr nanocomposite materials. The phase evolution was studied in the as-milled and heat-treated powders by XRD and TEM/EDS analyses. For the binary Al–Mg alloy, the predominant phase was an Al(Mg) solid solution (SS) and an amorphous phase was not possible to be synthesized. Upon adding 5at.% Zr to the Al–10Mg blended powder, some free Mg was present in addition to the formation of an Al(Zr,Mg)SS, which transformed to the Al 3 Zr intermetallic after annealing. When the Zr content was increased a nanocomposite of a solid solution and an intermetallic was obtained with considerable improvement in terms of structural stability and hardness. The presence of an oxide phase at 35% Zr might be responsible for the increased hardness in this particular alloy.