The low cost, rare earth free τ-phase of MnAl has high potential to partially replace bonded Nd2Fe14B rare earth permanent magnets. However, the τ-phase is metastable and it is experimentally difficult to obtain powders suitable for the permanent magnet alignment process, which requires the fine powders to have an appropriate microstructure and high τ-phase purity. In this work, a new method to make high purity τ-phase fine powders is presented. A high purity τ-phase Mn0.55Al0.45C0.02 alloy was synthesized by the drop synthesis method. The drop synthesized material was subjected to cryo milling and followed by a flash heating process. The crystal structure and microstructure of the drop synthesized, cryo milled and flash heated samples were studied by X-ray in situ powder diffraction, scanning electron microscopy, X-ray energy dispersive spectroscopy and electron backscatter diffraction. Magnetic properties and magnetic structure of the drop synthesized, cryo milled, flash heated samples were characterized by magnetometry and neutron powder diffraction, respectively. The results reveal that the 2 and 4 hours cryo milled and flash heated samples both exhibit high τ-phase purity and micron-sized round particle shapes. Moreover, the flash heated samples display high saturation magnetization as well as increased coercivity.