This report is a summary of the initial research done with Al 4wt% Mg nanocrystalline alloy, obtained by mechanical alloying in liquid N-2, reinforced with diamond nano sized particles (4-5 nm). At this stage, the cryomilling conditions have been optimized to obtain a nanocrystalline alloy powder and to effectively incorporate the diamond reinforcement particles. Additionally, the adopted process ensures efficiency in particle distribution.