The preparation of composite powders for plasma spraying by an in-house designed mechanofusion process is investigated. Results show that dry particle coating depends on the chemical and mechanical properties of powders. In metal/oxide and metal/oxide/carbide powder mixtures, fine ceramic particles coat the surface of the metallic coarser particles. A nearly rounded shape of the final composite particles is induced by the mechanical energy input with no formation of new phases. However with the carbide/metal powdered system, only an intimate mixture of components is achieved. It is suggested that the coating mechanism is governed by agglomeration and rolling phenomena.