The Mg₉₇Zn₁Y₂ bulk alloy has been produced by MA-HDH P/M process using MgH₂ powders as the starting material. As-extruded Mg₉₇Zn₁Y₂ bulk alloy of MAed powders showed a high compressive yield strength of 616 MPa and a plastic strain of 4.2%. These values were much higher than those of commercial ingot metallurgy (I/M) Mg alloys, such as AZ91 and ZK60. This is originated from the refinement of hcp-Mg grains, the solid solution hardening of Zn and Y, and the dispersion hardening by MgO and Y₂O₃ fine particles. No degradation was observed in mechanical properties of the alloy even after annealing at 673 K for prolonging time. This is considered to be due to the inhibition of the hcp-Mg grain growth by the densely dispersed MgO and Y₂O₃ fine particles. Therefore, MA-HDH P/M Mg₉₇Zn₁Y₂ alloy is promising as the structural material for high temperature applications.