Sm 2 Co 1 7 alloy nanoparticles of 10-250nm in size were prepared by mechanochemical processing involving the co-reduction of Sm 2 O 3 and CoO with Ca. The crystal structure of the nano-sized Sm 2 Co 1 7 particles was mainly of the ordered Th 2 Zn 1 7 -type. When embedded in the CaO matrix the Sm 2 Co 1 7 nanoparticles exhibited a high coercivity of 14.2kOe. The CaO by-product could be removed by a carefully controlled washing process without significant oxidation of the ultrafine alloy particles. After washing, the cold-pressed powder exhibited a coercivity value of 11.8kOe and a maximum magnetization of 92.0emu/g under an applied field of 50kOe.