The transformation and magnetic properties of Ni49.8Mn28.5Ga21.7 powders produced by ball milling and post-milling annealing were investigated in this study. It was found that ball milling suppresses both the Curie transition and the Heusler ↔ tetragonal martensitic phase transformation of the alloy. Ball milling also severely weakens the magnetization of the alloy. Annealing at elevated temperatures is effective in restoring the ferromagnetism and the martensitic transformation of the alloy. The suppression of the Curie transition is attributed to atomic disordering caused by ball milling. The suppression of the martensitic transformation is attributed to severe structural deformation as well as atomic disordering induced by the ball milling.