Is it illegal to make counterfeit nickels?

It is illegal. It is the same as producing counterfeit one-hundred dollar bills. The legality of it depends on its intended use. If they are being made for any kind of fraudulent purpose, then it is very illegal and you could spend many years in a Federal prison. If they are made as a novelty or bullion item, and clearly show a difference from a normal coin (such as a different size or color, or with the Word COPY on it), then there is no problem. Since the question asked about COUNTERFEIT nickels, it's obvious that they do not mean novelty items. As the first answer said, it is just as illegal as making your own 100 dollar bills. In fact, what may have been the largest counterfeit operation by an individual in the US, in the number of pieces if not in total amount, involved Jefferson Nickels. The story is buried somewhere in my past issues of The Numismatist or Numismatic News and IF I ever run across it I'll post the details here.