The main focus of this work was to study the microstructural evolution during the sintering and the heat treatment processes. The results indicated that mechanical alloying had induced the formation of supersaturated solid solution in immiscible Co-Al-W alloys, originating mainly from extensive grain boundary region, high dislocation density, and ample point defect. Spinodal decomposition is found to be the dominant mechanism for phase formation. The extremely fine grains (0.5∼3 μm) provide short-circuited diffusion paths for the atomic movement that leads to the spinodal decomposition behavior. γ precipitates were formed by the combination of spinodal decomposition mechanism and the chemical reaction between the decomposed products of CoAl and Co 3W.