Nanocrystalline gamma-alumina powders of 50-nm size were milled by high-energy hall milling. It was found that the pure gamma-alumina phase showed great stability and did not transform to any other phase even after a long milling time. On the other hand, gamma-alumina, which contained a small amount of the alpha-alumina phase, showed a gradual phase transformation from gamma- to alpha-alumina on milling. The phase transformation mechanism during milling appears to be nucleation and growth type and promoted by the alpha-alumina seed.