Nanopowders of iron aluminide [FeAl] and iron aluminum carbide [Fe3AlC0.5] are prepared by a two-step process involving the reduction of iron chloride [FeCl3] with lithium aluminum hydride [LiAlH4]. LiAlH4 serves both as a reducing agent and as a source of aluminum atoms required for the formation of the aluminides. The two-step process involves a solution phase reduction step resulting in the formation of colloidal mixtures, which when heat treated at temperatures above 550 degreesC undergo solid state reactions to form the alturtinides. Presence of ethereal solvents [tetrahydrofuran (THF) and diethyl ether] during the solution phase reduction step predominantly favors the formation of the carbide phase while reduction in a largely aromatic [75/25 volume percent toluene/THF] solvent mixture promotes the formation of the intermetallic FeAl phase in the heat-treated product. In the presence of ethereal solvents, the use of slower heating rates and performing a solvent removal step enhance the formation of the aluminide phase over the carbide phase. When the largely aromatic mixture is used as the solvent the treatments have no effect on the product distribution. Microstructure analysis using SEM & TEM imaging show that both FeAl and Fe3AlC0.5 nanoparticles formed are embedded within aluminum oxide matrices. The average particle size of the FeAl nanoparticles is 4-8 nm. (C) 2004 Elsevier Ltd. All rights reserved.