The Cr2FeAl inverse-based Heusler alloy nanoparticle was synthesized using mechanical alloy method. The as-prepared sample was annealed at various temperatures (700 °C, 800 °C, and 900 °C) in nitrogen gas for 5 h. The nanoparticles were annealed at varying temperatures in order to investigate the influence of annealing on crystal structure and magnetic properties. The structure, morphology, and magnetic properties were determined from X-ray diffraction (XRD), high-resolution scanning electron microscopy, and vibrating sample magnetometer. XRD analysis shows that the samples are having XA or Xα structure disordered phase. The grain size of 24-h ball-milled XA structure of Cr2FeAl Heusler alloy phase, calculated by analyzing the XRD peak broadening using Williamson and Hall approach, was 29 nm. The magnetic properties of Cr2FeAl Heusler alloy nanoparticles were studied, showing ferromagnetic behavior and low coercivity of soft magnetic nature. The Cr2FeAl Heusler alloy nanoparticles can be potential materials for use in spin polarized based spin sensors, spin devices, magnetic sensors, and magneto-electronic device applications.