Ball-milling induces high values of microstrain and a rapid decrease of the crystallite size in SmCo5 powders. However, milling is found to be less aggressive to SmCo5 when it is milled together with a ceramic antiferromagnet, such as NiO. In addition, as the milling proceeds, SmCo5 particles are progressively surrounded and soldered to NiO, finally becoming embedded in an anti ferromagnetic matrix. This microstructure, along with the local heating during the milling, favors the existence of antiferromagnetic-ferromagnetic exchange interactions, which result in an enhancement of the room-temperature coercivity, H-C. Moreover, values of squareness ratio, M-R/M-S (remanence/saturation magnetizations), very close to 1 are found in SMCo5+NiO ball-milled for 1 h, without need of particle alignment previously to measurement. The cooperative effects of ferromagnetic-ferromagnetic and anti ferromagnetic-ferromagnetic exchange interactions can account for this latter effect.