Nanocrystalline nickel ferrite (NiFe2O4) particles were successfully synthesized in situ in an amorphous silica matrix by mechanical activation at room temperature. Phase development in the amorphous precursors, derived via a modified sol-gel synthesis route, with increasing mechanical activation time was studied in detail by employing transmission electron microscopy, x-ray diffraction, and Raman spectroscopy. NiFe2O4 nanoparticles of 8.05 nm in mean particle size with a standard deviation of 1.24 nm, which were well dispersed in the silica matrix, were realized by 30 h of mechanical activation. The phase formation of nanocrystalline NiFe2O4 particles involves the nucleation of Fe3O4 in amorphous silica at the initial stage of mechanical activation, followed by the growth of nickel ferrite by incorporation of Ni2+ caions into Fe3O4. Their magnetic anisotropy, surface spin disorder, and cation distribution are investigated by considering both the strain imposed by silica matrix and the buffer effect during mechanical activation.