The phase transformation of mechanically milled nano-sized gamma-alumina particles was investigated. The structures and phase presentation of the powders before and after milling were characterized using X-ray diffraction, transmission electron microscopy, and photoluminescence measurement. The phase transformation kinetics was investigated using differential scanning calorimetry. It was found that significant amounts of defects were generated by milling. These defects dramatically lowered the temperatures and activation energies of the transformation by promoting the nucleation and diffusion. The accumulation of the defects appears to show a logarithmic dependence of milling time.