At the present Mg-Sr alloy is usually produced by alloy mixing process or melt-leaching-reduction process which has low productivity. A new process has been developed termed “Preparation Mg-Sr alloys using vacuum thermal reduction”. The principle and procedure of the new process were discussed in this paper. The reduction thermodynamics was analyzed, including establishing the oxygen potential diagram of Sr, Mg, Si and Al, determination of main reactions, and evaluation of Gibbs free energy in vacuum. The results showed that Mg-Sr alloys can be obtained by synchronous reduction of SrO and MgO from a mixture of MgO, SrO, Si, CaO. The equipment, reduction temperature and vacuum for the new process have been also discussed.