We present in this work the preparation of partially amorphous Al-Fe-Zr alloy powders by mechanical alloying and their consolidation by hot-extrusion. Elemental powder mixture corresponding to the composition Al90Fe7Zr3 Was mechanically alloyed with milling power of 10:1 and time varying from 5h to 100h. Milling for 60h resulted in a powder alloy microstructure composed mostly of nanocrystalline Al and amorphous phase. Heat treatment of such powder resulted in the formation of Al and also the equilibrium intermetallic Al3Zr and Al13Fe4 phases. The alloy powders have been hot extruded at 450degreesC and the microstructure of the consolidated alloy was very fine and composed also by the three equilibrium phases; Al, Al3Zr and Al13Fe4. This fine microstructure resulted in yield stress values in compression tests at room temperature in the range of 780MPa, associated with elongation to fracture of 10%.