In this work, Fe-Mn-Si based powder mixture having shape memory alloy composition prepared by mechanical alloying and systematically studied under different milling conditions. Effect of ball to powder ratio (BPR), type and amount of binder addition were investigated as process parameters. All mechanical alloying studies were performed under argon atmosphere and stainless steel balls and vials were used as milling media. X-Ray diffraction (XRD), laser particle size analysis (LPS), scanning electron microscopy (SEM) and optical microscopy (OM) technics were used to characterize the powders. Results were discussed for the evaluation of powder metallurgy which can be an alternative technique to obtain Fe-Mn-Si based shape memory alloys with the required composition and microstructural homogeneity in contrast to disadvantages of classical metallurgy.