The thermal stability up to 800 A degrees C of a nanocrystalline (NC) Ni (mean grain size similar to 25 nm) with similar to 4 wt% Al dispersed in the form of similar to 160-nm-sized particles, which was fabricated by co-electrodeposition from a nickel sulfate bath, has been investigated using differential scanning calorimetry (DSC), transmission electron microscopy (TEM) and X-ray diffraction (XRD). The results showed that microstructural evolution of the composite is temperature dependent, i.e., normal grain growth of the NC Ni, similar to 0.6 wt% Al solution into the Ni matrix and direct reaction between Al and Ni to form Ni3Al precipitates occurred at similar to 290, similar to 325 and similar to 575 A degrees C, respectively. The distribution of Al in Ni matrix with temperature is fully discussed. A DSC scanning up to 800 A degrees C of a nanocrystalline Ni matrix dispersing similar to 4 wt% Al particles (mean size: 160 nm) shows the particles did not significantly affect the normal grain growth of NC Ni and they have been converted into Ni3Al and Al solute atoms.