Dynamic recovery in nanocrystalline Ni and Ni₅₀Fe₅₀ with respective grain sizes of 65 nm and 15 nm is studied using stress reduction tests during in situ X-ray diffraction. The results are compared with a previous study on NC Ni with 35 nm grain size. Defect recovery by means of grain boundary processes plays an important role in controlling the strength evolution resulting in a constant flow stress during uniaxial deformation. The relative contributions of dislocation and grain boundary accommodation mechanisms are discussed in terms of grain size and alloying.