The influence of powder size and ball-milling time on the magnetic properties of $Fe_{73}Si_{16}B_7Nb_3Cu_1$ nanocrystalline alloy powder was investigated. Flake-shaped powders were produced by pulverizing the ribbons annealed at $550^circC$ for 1 hour. The powders were classified and consolidated into core shapes at a pressure of 18ton/$cm^2$. The initial permeability at 100kHz of the inductor core produced using $53-75mum$ powders showed the highest value although its consolidated density showed the lowest one. The reason for the result is due to the cracking of the particles larger than $75mum$ during the consolidation process. The ball-milling of powders for 2-4 hours improved the consolidation density and the initial permeability of the cores. The intrinsic coercivity of the powder decreased as well, resulting from the stress relief of the powder by a short-time milling.