In this paper, nanocrystalline FeNi alloy powders with different particle size were prepared by two-step mechanical alloying (MA), the first step of the processes is FeNi nanocrystalline alloying and the second step modifies particle size. As-milled powders were randomly dispersed in paraffin at a weight ratio of 5:1 for microwave complex permeability test and comparision in the frequency range of 0.5-18 GHz. It is observed and discussed that microwave complex permeability is prominently affected by FeNi microstructure and particle size. In this work, Fe0.85Ni0.15 nanocrystalline powders exhibit high value of complex permeability in 1-10 GHz, and the sample with particle size of 2.34mm possesses the maximum value as m0 6.32 at 1.81GHz, m00 3.45 at 4.09 GHz. This value may be useful for thin-thickness and wide-band microwave absorber.