Powder blends consisting of prealloyed FCC Ag-Cu solid solutions and elemental Fe powders were ball milled in overall compositions of Ag25Cu50Fe25, andAg40Cu20Fe40. The phase evolution with milling time was investigated by x-ray diffraction and differential scanning calorimetry. For the sample with higher Cu concentration, a ternary FCC alloy phase was formed, while milling the other sample resulted in a two phase mixture consisting of a Ag-rich FCC and an Fe-rich BCC solid solution. About the same amount of enthalpy between 12 and 13 kJ/g-atom is stored in the final states for the two different compositions. Two models based on kinetic and energetic considerations will be discussed and compared to the results. The kinetic model is based on the competition between forced atomic motion during shearing, which is driving the system towards a homogeneous alloy, and thermally activated diffusion, which favors phase separation. For the energetic model, the energy balance is calculated and a phase transformation is expected, if the required energy can be stored in phase boundaries.