Nanocrystalline aluminium powder has been prepared by high-energy ball milling of flaked micron-sized aluminium powder in the presence of 10 wt% of graphite under argon atmosphere. The structure and chemical composition of as-prepared nanocomposites and the their thermally induced changes are studied by X-ray diffraction (XRD), transmission electron microscopy (TEM), and simultaneous TG-DTA technique (SDT). TEM studies reveal that the aluminum nanoparticles have a size of 20-50 nm and they are randomly distributed within graphite "threads," which in turn form aggregates of 3-5 mum. The oxidation behaviour of nano-Al in air was studied and compared to a precursor mixture of Al powder with average particle size of 21 mum and 10 wt% of graphite. For both powders, two stages of oxidation were observed in the temperature range 500-660degreesC and beyond 750degreesC. The mass gain for the first oxidation stage of the nano-powder is 3.5 times higher than that of the micron-sized one. A decrease of the activation energy of Al oxidation has been found for the nano-Al powder in comparison to the precursor aluminium. The evolution of crystal structure of aluminium oxide during oxidation of the Al/C composite powder has been followed by XRD. (C) 2004 Kluwer Academic Publishers.