Sm-16.7wt%Co alloy powders were prepared by high energy ball milling under the conditions of various milling time and the content of process control agent (PCA), and their microstructure and magnetic properties were investigated to establish optimum processing conditions. The initial powders employed showed irregular shape and had a size ranging from 5 to $110;{mu}m$. After milling for 5 h, the shape of powders changed to round shape and their mean powder size was approximately $5;{mu}m$, which consisted of the agglomerated nano-sized particles with 15 nm in diameter. The coercivity was reduced with increasing the milling time, whereas the saturation magnetization increased. As the content of PCA increased, the powder size minutely decreased to approximately $7;{mu}m$ at the PCA content of 10 wt%. The XRD patterns showed that the main diffraction peaks disappeared apparently after milling, indicating the formation of amorphous structure. The measured values of coercivity were almost unchanged with increasing the content of PCA.