Magnetic properties of nanostructured materials are affected in complicated manner by their microstructure such as grain size, internal strain and crystal structure. Thus, studies on the synthesis of nanostructured materials with controlled microstructure are necessary for a significant improvement in magnetic properties. It is well known that when Fe-Co alloy undergoes ordering transformation, soft magnetic properties could be obtained. There are many reports that the magnetic properties of the materials can be changed with variation of grain size. In the present work, nanostructured Fe-50at.%Co alloy powder produced by hydrogen reduction process (HRP) starting with two oxide powder mixtures of $Fe_2O_3;and; Co_3O_4$. The mean grain size of the HRP powders was about 40 nm and coercivity of the: powders was about 43 Oe.