In the present work, nano-structured ferritic and austenitic stainless steel powders were prepared by mechanical alloying for a period of 10 hours in a high energy planetary ball mill. An austenitic stainless steel composition containing elemental powders of 18%Cr - 13%Ni – Fe and for ferritic stainless steel of 17%Cr -1%Ni – Fe were milled in a specially designed high energy planetary mill under toluene. The effect of stearic acid on synthesis stainless steel was observed during mechanical alloying. The samples were taken out from the ball mill in the intervals of 0 hours, 30 minutes, 2 hours, 5 hours and 10 hours. Then the powders were characterized by X-ray diffraction, scanning electron microscopy and particle size analysis to get brief idea about the nano-structured stainless steel produced and to determine the phase transformation and microstructural morphology. The crystallite size and strain was determined by using Williamson-Hall method. The lattice parameter of the particle was calculated by using Nelson-Riley function. By using stearic acid the crystallite size of austenitic stainless steel changes from 124.63nm to 6.1nm and for ferritic stainless steel it changes from 120.70 nm to 8.47 nm after 10 hours of milling. The lattice strain continuously increases with milling in both cases. It has been found that stearic acid prevent agglomeration of particles and hinders phase transformation to some extent due to formation of layer on particle surface as it prevent diffusion. It also has been noticed that stearic acid prevents the strain hardening of the powder particles
