Powders of Fe, Co and Ge blended in mixtures of Fe60Ge40, Co60Ge40, Fe30Co30Ge40 (at.%) were synthesized into alloys by milling in a high energy ball-mill. Only beta-phases with hexagonal structure B8(2) are formed in all alloys after 2 h of mechanical alloying (MA). In Fe60Ge40 and Fe30Co30Ge40 chemical interaction occurred with simultaneous formation of beta-Fe5Ge3 and FeGe2. In the system of Fe-Ge the FeGe2 phase is characterized by the highest negative enthalpy of formation in comparison with other phases, therefore it is preferably formed at the initial stage of MA. In the Co60Ge40 alloy the beta-Co5Ge3-phase is formed without intermediate reaction products. The obtained beta-phases have a nanocrystalline structure (13-18 nm) and are characterized by considerable local chemical heterogeneity. Structural transformations during heating to 720degreesC of metastable beta-Fe5Ge3 result in a stable B8(2) phase and consist of micro deformation relaxation and elimination of chemical heterogeneity. The heating of chemically heterogeneous beta-Co5Ge3 results in its stratification and formation of metastable Co2Ge with orthorhombic structure. At T greater than or equal to 630degreesC, Co2Ge redissolves in hexagonal beta-Co5Ge3 and after heating to 720degreesC the beta-phase becomes chemically homogeneous. (C) 2004 Kluwer Academic Publishers.