The decomposition process mechanisms have been investigated in a Fe50Au25Pd25 (at.%) alloy processed by severe plastic deformation. Phases were characterized by X-ray diffraction (XRD) and microstructures were observed using transmission electron microscopy (TEM). In the coarse grain alloy homogenized and aged at 450 A degrees C, the bcc alpha-Fe and fcc AuPd phases nucleate in the fcc supersaturated solid solution and grow by a discontinuous precipitation process resulting in a typical lamellar structure. The grain size of the homogenized FeAuPd alloy was reduced in a range of 50-100 nm by high pressure torsion (HPT). Aging at 450 A degrees C this nanostructure leads to the decomposition of the solid solution into an equi-axed microstructure. The grain growth is very limited during aging and the grain size remains under 100 nm. The combination of two phases with different crystallographic structures (bcc alpha-Fe and fcc AuPd) and of the nanoscaled grain size gives rise to a significant hardening of the alloy.