A stable nano body-centered cubic (bcc) CoFe2 alloy was isolated by employing a combination of N2H4.H2O reduction and sonochemical route under basic conditions. This alloy has proved to be a potential precursor for CoFe2O4 production. X-ray diffraction and transmission electron microscopy confirms the formation of a bcc phase CoFe2 alloy with particle size <10 nm and spherical morphology. Thermogravimetric analysis confirmed the oxidation of the alloy composition showing a weight gain between 200 and 500 °C, which corresponds to fully oxidized CoFe2O4. A significant increase in the saturation magnetization (Ms = 230 emu/g) for the nano CoFe2 alloy was observed in comparison with that of the theoretical bulk value (200 emu/g) at 300 K.