An icosahedral phase (i-phase) has been synthesized by mechanical alloying of an elemental blend of Al70Cu2oFe10Mechanical alloying of A1 and Fe in thestoichiometric ratio of 3:1 and continued milling after the addition of A1 andCu to yield the nominal composition of Al70Cu20Fe10does not result in the i-phase formation which requires subsequent annealing at 600°C for 4h for itsformation. A single i-phase cannot be obtained even after annealing. In allcases, an Al(Cu, Fe) solid solution (β phase) has been found along with the i-phase. The i-phase appears to form by a peritectoid type of reaction between the βphase and Al2Cu. The electrical resistivity of the nanocrystalline i-phase obtainedin the present study was found to be about 2-3 orders higher than that found inthin films and it shows semiconducting behavior. © 2000 Taylor & Francis Ltd.