Boiler steel is prone to thermal corrosion and abrasion in high-temperature environments, making thermal spray protective coatings a vital solution for enhancing the corrosion and abrasion resistance of boilers. This study focuses on the development of a novel AlCrCu_0.5Mo_0.5Ni high-entropy alloy powder synthesized through mechanical alloying (MA) using monolithic metal powders as starting materials. The effects of milling time on the phase structure, grain size, and microstructure evolution of the MA powder were investigated. Phase characterization was performed using XRD; grain size, lattice strain, and lattice constant were measured; morphological and microstructural analyses were performed using SEM and TEM. Phase regulation through vacuum isothermal annealing techniques was also explored. The findings indicated the formation of two bcc (bcc1, bcc2) and one fcc solid solution phases within the high-entropy alloy powder. With increased milling time, the MA powder experienced plastic deformation, which led to a reduction in grain size and an augmentation of lattice strain. Powder particle fragmentation and refinement of the element-enriched zones facilitated enhanced diffusion and alloying of the elements. At 40 h of milling, the powder particles exhibited a more homogeneous elemental distribution, with phase contents of 41% bcc1, 37% bcc2, and 22% fcc, and an average particle size of 24 μm, making them suitable for thermal spray applications. Annealing at 800 ^oC led to the decomposition of the bcc2 solid solution structure after 40 h of ball milling. Upon increasing the annealing temperature to 1000 ^oC, complete decomposition of the bcc2 solid solution was observed, resulting in 68% bcc1 and 21% fcc phases, with the emergence of 11% CrMo phase. As the annealing temperature was increased, the MA powder released significant strain energy, increasing grain size and a reduction in lattice strain. The maximum hardness and elasticity modulus were achieved after annealing at 800 ^oC, recorded at (6.54 ± 0.58) and (65.62 ± 3.07) GPa, respectively.