MA-HDH P/M process for the production of Mg bulk alloy has been established by using MgH2 powders as the starting material. The as-extruded Mg95Zn2.5Zr2.5 bulk alloy of MAed powders showed high compressive yield strength of 613 MPa, which was originated from the refinement of hcp-Mg grains, the solid solution hardening of Zn and Zr, and the precipitation hardening by MgO fine particles. The compressive yield strength of the MA-HDH P/M Mg95Zn2.5Zr2.5 alloy annealed at 823K for 10.8 ks was as high as that of the as-extruded Mg95Zn2.5Zr2.5 bulk alloy This seems to be due to the suppression of the hcp-Mg grain growth by the densely dispersed MgO fine particles.