We report the structure, thermal and magnetic properties of a non-equilibrium $Al_{0.6}(Fe_{50}Cu_{50})_{0.4}$ alloy powder produced by rod milling and chemical leaching. An X-ray diffractometry(XRD), a transmission electron microscope(TEM), a differential scanning calorimeter(DSC), a vibrating sample magnetometer(VSM), and superconducting quantum interference device(SQUID) were utilized to characterize the as-milled and leaching specimens. The crystallite size reached a value of about 8.82 nm. In the DSC experiment, the peak temperatures and crystallization temperatures decreased with increasing milling time. The activation energy of crystallization is 200.5 kJ/mole for as-milled alloy powder. The intensities of the XRD peaks of as-milled powders associated with the bcc type $Al_{0.5}Fe_{0.5}$ structure formative at $350^{circ}C$ sharply increase with increasing annealing temperature. Above $400^{circ}C$, peaks alloted to $Al_{0.5}Fe_{0.5}$ and $Al_{5}Fe_{2}$ are observed. After annealing at $600^{circ}C$ for 1h, the leached Ll specimen transformed into bcc $alpha$-Fe and fcc Cu phases, accompanied by a change in the structural and magnetic properties. The saturation magnetization decreased with increasing milling time, and a value of about 8.42 emu/g was reached at 500 h of milling. The coercivity reached a maximum value of about 142.7 Oe after 500 h of milling. The magnetization of leached specimens as function of fields were higher at 5 K, and increased more sharply at 5 K than at 100 K.