An attempt has been made to produce high strength Mg alloys by mechanical alloying with stearic acid as milling additive. The mechanically milled (MM) Mg powder of almost 100 % was recovered by adding stearic acid of 1.5 mass % or more. The optimum amount of the stearic acid was 2.5 mass %. The mechanically alloyed powder metallurgy (MA P/M) AZ91 alloy exhibited a Vickers hardness of 149 Hv, compressive yield strength of 704, MPa and plastic strain of 1.7 %. This alloy consisted of only hcp-Mg with a grain size of 100 to 200 nm. On the other hand, the MA P/M Mg97Zn1Y2 alloy exhibited a Vickers hardness of 118 Hv, compressive yield strength of 431 MPa and plastic strain of 4.7 %. This alloy consisted of Mg24Y5 and hcp-Mg with a grain size of 400 to 500 nm. Although the Vickers hardness of the MA P/M AZ91 alloy increased up to 162 Hv by a heat treatment, the heat treated alloy became very brittle.