Grain growth stability in mechanically alloyed nanocrystalline Pd₈₁Zr₁₉ was investigated. Previous research suggested that the alloy is thermodynamically stable to very high temperatures. When X-ray diffraction (XRD) is used to estimate the grain size of annealed samples the alloy appears to have remarkable resistance to growth. Microscopy done here on the same alloy indicated that the XRD estimates are not accurate for samples annealed above 600°C. It appears that when this alloy is annealed at high temperatures XRD peak broadening is retained for reasons that are unrelated to the grain size. The alloy still has much improved grain growth stability compared with pure Pd, but not as significant as suggested by the XRD results. A similar phenomenon was observed in Fe–Zr alloys.