Nanocrystalline Mg-Zn-ferrite is prepared by ball milling the stoichiometric powder mixture of MgO, ZnO and alpha-Fe2O3. Reduction of particle size and collision temperature favors formation of non-stoichiometric ferrite phase. The process of mechanosynthesis of Mg-Zn-ferrite leads to the formation of a metastable inverse spinel structure at the early stage of milling. In the course of milling up to 25 h leads to inverse spinel transform to its normal counterpart. Structural and microstructural evaluation of the unmilled and ball-milled samples have been characterized by Rietveld's method of structure refinement of X-ray powder diffraction data and confirmed by direct observations using FE-SEM and HR-TEM. Particle size, RMS lattice strain, change in lattice parameters and phase content of individual phases have been estimated from Rielveld's analysis. A comparative study of microstructure revealed from direct observations corroborates the findings of X-ray diffraction study in all respects. Analysis of ball-milled samples reveals that the inverse spinel phase content started to reduce in relatively long milling time and disappeared completely within 20 h milling time. After 25 h of milling, ball-milled powder mixture contain normal phase of Mg-Zn-ferrite with a trace amount of alpha-Fe2O3. (c) 2007 Elsevier B.V. All rights reserved.