Powders of Al68.5Ni31.5 were produced using the impulse atomization technique. The molten droplets were cooled in-flight by the stagnant helium or nitrogen in the atomizing chamber, and the resulting powders were sieved into different size ranges. Scanning electron microscopy, X-ray diffraction, and neutron diffraction were used in order to study the microstructure and to quantify the phase fractions in the samples. The computer software GSAS was used to calculate the weight fraction of the existing phases, namely Al3Ni2, Al3Ni, and Al, by the profile refinement method. X-ray micro-tomography and optical microscopy were used to study the porosity formation inside the particles. It was found that for particles having sizes decreasing from 925 to 256 mu m (increasing cooling rate), the weight fraction of Al3Ni and eutectic Al decreases while that of Al3Ni2 increases. Furthermore, the droplets formed at higher cooling rates yielded a lower volume fraction of porosity.