In the present study, attempts have been made to synthesize the nano-crystalline (Co, Ni)Al2O4 spinel powders by ball milling and subsequent annealing. An alloy of Al70Co15Ni15, exhibiting the formation of a complex intermetallic compound known as decagonal quasicrystal is selected as the starting material for mechanical milling. It is interesting to note that this alloy is close to the stoichiometry of aluminum and transition metal atoms required to form the aluminate spinel. The milling was carried out in an attritor mill at 400 rpm for 40 hours with ball to powder ratio of 20 : 1 in hexane medium. Subsequent to this annealing was performed in an air ambience for 10, 20, and 40 h at 600 degrees C in side the furnace in order to oxidize the decagonal phase and finally to form the spinel structure. The X-ray diffraction (XRD) and transmission electron microscopy (TEM) confirmed the formation of nano-sized decagonal phase after milling and then (Co, Ni)Al2O4 spinel type phase after annealing. The XRD studies reveal the lattice parameter to be 8.075 angstroms and the lattice strain as 0.6%. The XRD and TEM explorations of spinel phase indicate the average grain size to be approximately 40 nm.