The technique of mechanical alloying and annealing has been used to obtain NiTiCu shape memory alloy with nanocrystalline structure. A stoichiometric mixture of high-purity elemental powders of Ni, Ti and Cu with a nominal composition NiTiCu10 was subjected to intense mechanical alloying in a high-energy ball mill under different milling conditions. The fabricated alloys were characterized by X-ray diffraction and scanning electron microscopy. Experimental results demonstrated that after an optimum milling time of 40h, NiTiCu (B2) phase with the crystallite size of less than 26nm was achieved. Annealing of milled powders at 1173K for 900s resulted in the formation of nanometric NiTiCu (B19′) phase, release of internal strain and grain growth. The analyses showed that high-energy milling followed by annealing has resulted in the formation of nanocrystalline NiTiCu alloy with appropriate morphology and homogeneous structure.