In this study, Ti3AlC2/Al2O3 nanocomposite powder was synthesized via mechanical alloying from TiO2, Al, and C as raw materials. Phase development and structural changes during ball milling were investigated by X-ray diffraction technique (XRD), field-emission gun scanning electron microscopy (FESEM) and transition electron microscopy (TEM). Results showed that TiAl, TiC and Al2O3 intermediate phases were formed after 20 h milling of starting materials. With the increase of milling time to 40 h, the desired Ti3AlC2/Al2O3 nanocomposite was achieved. It can be seen that Ti3AlC2 is not synthesized by a single reaction between TiO2, Al, and C and is occurred with a series of reactions between intermediate products (TiAl and TiC). TEM image of 40 h milled powder confirmed that the synthesized Ti3AlC2/Al2O3 powder has nanosized particles in the range of 50 nm.