Mechanically alloyed aluminum-iodine composites with iodine concentrations from about 4 to 17 wt% were prepared and characterized using elemental aluminum and iodine as starting materials. A reference sample was also prepared from aluminum and AlI3. A shaker mill and an attritor mill operated at both, room temperature and liquid nitrogen temperature were used for preparation. Materials were characterized by electron microscopy and x-ray diffraction. The iodine release upon heating was studied using thermogravimetry. Mechanical alloying was found to be effective for preparation of Al-I composites that do not release iodine until the material is brought to high temperatures. Mechanical alloying in nitrogen gas at liquid nitrogen temperature was more effective in preparing stabilized Al-I composites than milling at room temperature. Iodine was not retained in the materials milled directly in liquid nitrogen. In addition to poorly crystalline AlI3, other iodine compounds were present in the mechanically alloyed powders. Assuming that such compounds are similar to other mechanically alloyed materials, it is reasonable to expect that iodine is mixed with aluminum on the atomic scale, forming metastable Al-I compounds. In such compounds, iodine is expected to be bonded to aluminum more strongly than in AlI3, explaining why their thermal decomposition and respective iodine release occur at higher temperatures compared to decomposition and boiling of AlI3.