Nanocrystallite Mg-3Al-Zn alloy was synthesized by ball milling of elemental powders of Mg, Al and Zn under hydrogen atmosphere. The powders of Mg, Al and Zn were mechanical alloying and disproportionated by ball milling under hydrogen and desorption-recombination was then performed. The structural changes due to both the milling in hydrogen and the subsequent desorption-recombination treatment were characterized by X-ray diffraction (XRD). The desorption–recombination behavior of the hydrogenation alloy was investigated by differential scanning calorimetry (DSC). The morphology and microstructure of the final alloy powders subject to desorption–recombination treatment were observed by TEM and HRTEM, respectively. The results showed that, by milling in hydrogen for 60 h, the Mg-3Al-Zn alloy was disproportionated into nano-structured with average size of about 60-70 nm, and a subsequent desorption–recombination treatment at 320°C for 30 min alloy didn’t vary the average crystallite size of powders.