Fabrication of bulk nanocomposite materials, which contain a magnetically hard phase and a magnetically soft phase with desired nanoscale morphology and composition distribution has proven to be challenging. Here we demonstrate that SmCo/Fe(Co) hard/soft nanocomposite materials can be produced by distributing the soft magnetic alpha-Fe(Co) phase particles homogenously in a hard magnetic SmCo phase matrix through a combination of high-energy ball milling and a warm compaction. Severe plastic deformation during the ball milling results in nanoscaling of the soft phase with size reduction from micrometers to similar to 15 nm. Up to 35% of the soft phase can be incorporated into the composites without coarsening. This process produces fully dense bulk isotropic nanocomposite materials with remarkable energy-product enhancement (up to 300%) owing to effective inter-phase exchange coupling.