The complete amorphous phase transformation of Sm-Fe-Zr-Nb alloy powders during high-energy ball milling process was investigated. The effects of milling time on the phase transformation and morphology of the Sm-Fe-Zr-Nb alloy powders were analyzed by X-ray diffraction, scanning electron microscopy, and high-resolution transmission electron microscopy. The result shows that complete amorphous microstructure is obtained after milling for about 2.5 h, and α-Fe phase (~5 nm) is precipitated from the amorphous matrix when the milling time is over 3 h. The number of short-range ordered structure increases. The uniform microstructure and the TbCu₇-type single phase are obtained by crystallizing the amorphous precursors milled for 2.5 h. The size of equiaxed grain is ~30 nm. This kind of micro-regulation plays a key role in improving the magnetic properties after nitriding.