The efects of mechanical aloying conditions and the type of reducing agent on the solid state reductionof haematite $Fe_2O_3$ have been investigated at room temperature. Aluminium titanium zinc and copper were used as reducing agent. Nanocomposites of metal-oxide in which oxide particles with nano size were dispersed in Fe matrix were obtained by mechanical alloying of $Fe_2O_3$ with aluminium and titanium respectively However the reduction of $Fe_2O_3$ by coppe was not occurred Composite materials of iron with $Al_2O_3$ and $TiO_2$ were obtained from the system of $Fe_2O_3-Al$ and $Fe_2O_3-Ti$ after ball milling for 20 hrs and 30 hrs respectively. And the system of $Fe_2O_3-Zn$ resulted in the formationof FeO with ZnO after ball milling of 120 hrs. The final grain sizes of iron estimated by X-ray diffraction line-width measurement were in the ranges of 24~33 nm.