Magnetic properties of nanostructured materials are affected in complicated manner by their microstructure such as pain size (or particle size), internal strain and crystal structure. Thus, studies on the synthesis of nanostructured materials with controlled microstructure are necessary fur a significant improvement in magnetic properties. In the present work, nanostructured Fe-Co alloy powders with a grain size of 50 nm were successfully fabricated from the powder mixtures of (99.9% purity) $FeCl_2$ and $CoCl_2$ by chemical solution mixing and hydrogen reduction.