Nanocrystalline samples with grains in the range of 12–94 nm were synthesized via thermal crystallization of the amorphous alloy. High-resolution electron microscope observations show that the nanocrystalline Ni33Zr67 sample is composed of many “orientation regions.’’ Each orientation region consists of a high density of well-defined microtwin domains. Positron annihilation spectroscopy reveals that two types of defects are present in the Ni33Zr67 samples. With the increase of annealing temperature up to 973 K, the two types of defects show remarkable change while microhardness changes slightly. The contributions of the microtwin domain and the nature of constituent phases to microhardness in the present alloy system are discussed. © 1997 American Institute of Physics.