A detailed correlation between microstructure evolution and allotropie phase transformations occurring in Co when subjected to ball milling has been carried out. After short-term milling, the starting mixture of hcp + fcc Co develops into an almost pure hcp phase. However, for longer milling times, plastic deformation introduces large amounts of stacking faults, especially of twin type, in the hcp structure. As a consequence, some of the hcp Co is converted back into fcc and the hcp unit cell is progressively anisotropically distorted. After long-term milling, a steady 'pseudo-equilibrium' state is observed, where all microstructural parameters, including the fcc percentage, tend to level off. However, the milling intensity can still be adjusted to increase further the stacking-fault probability and, consequently, the amount of fcc Co in the milled powders. The results imply that the stacking-fault formation, rather than the local temperature rise or crystallite size reduction associated with the milling process, is the main mechanism governing the hcp-fcc transformation.