D.c. plasma-spouted/fluidized bed was applied to the granulation of spherical alloy grains from metal powder mixtures. From a mixture of iron powder (d(p)=149-210 mu m) and aluminum powder (d(p)=74-88 mu m and 125-149 mu m) alloy grains of 1-5 mm in diameter were obtained. The grains exhibited a dense homogeneous core and a porous nonhomogeneous shell structure. The grains were quite spherical; the average aspect ratio of the grains was larger than 0.85. The mass fraction of iron in the core section of product grains depended on the Al/Fe ratio of initial powder mixtures but was insensitive to the size of product grains and to the size of initial aluminum particles. The growth mechanism was discussed based on the growth rate measurement. Selective growth of seed grains was observed when sufficient seed grains were added to the starting powder mixture.