Ultrafine Fe powders were synthesized by mechanochemical solid‐state reduction of FeCl3 by Na and subsequent removal of the reaction by‐products. X‐ray diffraction, Mössbauer spectroscopy, and transmission electron microscopy measurements showed that Fe particles with a relatively uniform particle size ∼10 nm were formed during the mechanical milling process. The powders exhibited coercivity values of 350–550 Oe, consistent with that expected for separated nanosized particles. This study demonstrates that mechanochemical processing has significant potential for the synthesis of ultrafine metal powders in an economic and efficient way.