We present in this work the preparation of partially amorphous Al90Fe7Nb3 alloy powders by mechanical alloying using high-purity elemental metals as starting materials and their consolidation by hot-extrusion. 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 AI and also the equilibrium intermetallic Al3Nb and Al13Fe4 phases. The alloy powders have been hot extruded at 480degreesC and the microstructure of the consolidated alloy was composed of the three equilibrium phases, Al, Al3Nb and Al13Fe4. The microstructure, which was formed by very fine and also sub-micrometric crystals resulted in yield stress values in compression tests at room temperature near 740MPa, associated with elongation of about 10 %.