Fe40Al60 (at%) intermetallic alloy composition was obtained by conventional casting methods and subsequently subjected to high-energy mechanical milling under different conditions of humidity. All samples were characterized by X-ray diffraction patterns (XRD) and transmission electron microcopy (TEM) images. Both techniques confirm the formation of bayerite phase and the presence of nano-crystals of FeAl. The presence of bayerite phase is attributed to the hydrogen embrittlement reaction which occurs in the intermetallic material in where hydrogen is released. It is observed that as the milling time increased the bayerite phase is increased and consequently hydrogen is increased too. As observed by TEM results hydrogen contributes in the reduction of crystal size due to the cleavage fracture mechanism. In this way the particles which are surrounded by the bayerite phase reaches nanometric sizes.