Isotropic nanocrystalline Sm(Co,Zr)7 permanent magnet powders of the TbCu7 type structure and with high coercivity and enhanced remanent magnetization has been synthesized by mechanically milling Sm12.5Co87.5-xZrx alloys (x = 0, 1, 2, 3) alloys and subsequently appropriate annealing. The mechanical-milling process of the alloys and the formation of nanostructured Sm(Co,Zr)7 magnet powders have been investigated with respect to hard magnetic properties. Hard magnetic properties are found to be strongly dependent upon the processing condition (like milling time, annealing temperature, etc.). Optimal coercivity Hci of value above 21 kOe has been obtained in Sm12.5Co85.5Zr2 magnet powders subjected to milling for 5 hr and annealing at 600°C for 20min. Optimal remanent magnetization Mr of 73.4 emu/g, remanence ratio Mr/Ms of 0.71, and maximum energy products (BH)max of over 13 MGOe have been realized in Sm12.5Co87.5-xZrx (x = 1, 2) magnet powders with grain size of 15-20 nm. The hard magnetic properties are ascribed to the nanosized Sm(Co,Zr)7 phase of the TbCu7 type structure with grain size of 10-20 nm. The enhancement of remanent magnetization may be contributed from the enhanced exchange-coupling interaction between nanosized grains.