In the present study, we systematically investigated the effect of mechanical milling on the magnetic properties of Sm₂Fe₁₇N_x powders produced by the reduction-diffusion process. The Sm-Fe powders obtained by the reduction-diffusion process were composed of an Sm₂Fe₁₇ single phase. After nitrogenation, the coercivity and saturation magnetization of the powders were 0.48 kOe and 13.32 kG, respectively. The particle size largely decreased down to less than 2 μm in diameter after ball milling for 30 hours. However, there is no evidence that the Sm₂Fe₁₇N_x was decomposed to Sm-N and α-Fe even after ball milling for 30 hours. The coercivity was significantly improved up to 8.82 kOe after milling for 60 hours. However, the magnetization decreased linearly with the ball milling time.