A nanostructured surface layer was formed on an Inconel 600 plate by subjecting it to surface mechanical attrition treatment at room temperature. Transmission electron microscopy and high-resolution transmission electron microscopy of the treated surface layer were carried out to reveal the underlying grain refinement mechanism. Experimental observations showed that the strain-induced nanocrystallization in the current sample occurred via formation of mechanical microtwins and subsequent interaction of the microtwins with dislocations in the surface layer. The development of high-density dislocation arrays inside the twin-matrix lamellae provides precursors for grain boundaries that subdivide the nanometer-thick lamellae into equiaxed, nanometer-sized grains with random orientations.