Nanocrystalline metals are often produced in a state of stress which can adversely affect certain properties, e.g. corrosion resistance, wear, fatigue strength, etc. This stress is referred to as internal or “intrinsic” stress since it is not directly caused by applied loads. The structural causes of these stresses in nanocrystalline materials are not fully understood and are therefore an area of particular interest. The internal stresses of nanocrystalline Ni and Ni-16wt%Fe were measured and found to increase with the addition of iron. Characterization using HR-TEM revealed no signs of porosity, second phase particles, or a high density of dislocations. Both materials possessed well defined high-angle grain boundaries. The main structural difference between the two materials was found to be grain size and correspondingly, a decrease in grain size resulted in an increase in internal stress which supports the applicability of the coalescence theory. The current study also provides evidence to rule out the effect of voids (or porosity), dislocations, and second phases as possible causes of internal stress.