The extended x-ray absorption fine structure (EXAFS) and x-ray diffraction (XRD) techniques have been used to study the dependence of structural changes on annealing temperature for metastable body centered cubic (bcc) Fe80Cu20 alloy synthesized by mechanical alloying. In the temperature range from 300 to 873 K, the lattice constant of the bcc-structured phase exhibits a nearly linear decrease with the increase of annealing temperature. This is mainly due to the segregation of Cu atoms from the bcc Fe80Cu20 alloy to form the face centered cubic (fcc) Cu phase. Annealing at 603 K results in an increase of the average Cu—Cu distance RCu—Cu by about 0.003 nm, and about 50% Cu atoms are segregated from the bcc Fe80Cu20 alloy. After annealing at 773K, two phases of bcc α-Fe and fcc-Cu are almost completely separated from the as-milled bcc Fe80Cu20 alloy.