Fe55Mn10Al35 alloys were prepared by mechanical alloying. Local ordering around the central atom was examined with milling time by using extended X-ray absorption fine structure. The structural and magnetic evolution was analyzed by EXAFS and Mossbauer study as a function of milling time. The first shell of the Fourier transformed spectra changed with milling time, indicating a change in the local ordering around the central Fe atom. X-ray diffraction patterns indicate a bcc phase after 24 h milling time. For 1 h milled sample, Mossbauer spectra analysed three sextets as bcc-Fe phase, broad sextet and Fe surrounded Al and Mn phase. The magnetization showed decrease with milling time corresponding to magnetic dilution.