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Bulk materials of TbFe2 (giant magnetostrictive) and TbFe3 were prepared by arc melting the constituent high pure elements under argon atmosphere. The two materials together were ball milled in toluene atmosphere for 70 h. The mixture is found to be predominantly amorphous after about 37 h of milling. The saturation-magnetization initially was found to increase and then found to decrease with milling time. The anisotropy of the material is seen to decrease as the milling time was increased, due to the formation of the amorphous phase. Differential scanning calorimetry (DSC) studies on the powders milled for 70 h showed two phase transitions, one at 90 °C and another one at 110 °C. Powder X-ray diffraction (XRD) of the annealed sample showed that a metastable phase formed at 90 °C and is found to be TbFe5 phase and that the phase formed at 110 °C was TbFe3. The average particle size calculated using the Sherrer's formula is found to be 30 nm. [ABSTRACT FROM AUTHOR]