The Sm-Fe alloy powders were prepared by cryomilling in liquid nitrogen. By means of XRD, HRTEM and Inert Gas Pulse-Infrared-Thermal Conductivity method, the microstructure evolution of the Sm2Fe17 alloy powders during the cryomilling process was studied. The results show that the grain sizes of Sm-Fe alloy powders were rapidly reduced by cryomilling in liquid nitrogen. The grain sizes of the alloy powders were about 10 nm and 5 nm after cryomilling for 5 h and 9 h, respectively. The nitrogen content in the Sm-Fe alloy powders increased with longer cryomilling time. After cryomilling at 150 r/min for 9 h, the content of nitrogen reached 1.62wt%. With increasing of the cryomilling time, the Sm2Fel7 phase changed to amorphous phase. Low cryomilling speed can slow down the formation of amorphous phases