Fabrication of Fe_3AlC matrix in-situ composite, reinforced by a FeAl phase, was studied by using the powder metallurgical processing route. Especially, in order to disperse the second phase more finely, we chose the mechanical alloying process. We investigated the microstructural and mechanical properties of the consolidated material. The alloyed powders milled for 360ks and 1800ks were consolidated by using vacuum hot pressing at 1273K and 150MPa for 3.6ks. The compacts showed almost full density. The compact obtained from 1800ks milled powder consisted of a Fe_3AlC matrix and FeAl second phase (average particle size was less than 1μm). The compact showed HV746, which was higher than that of the arc melted Fe_3AlC monolithic material, HV603.