The new bulk mechanical alloying process (Equal Channel Angular Bulk Mechanical Alloying process: ECABMA) was developed in this research. Magnesium alloy chip (AM60) mixed with 5-weight percent titanium powder was processed into a magnesium composite billet via ECABMA process. The magnesium composite billet was extruded into round bar, and several mechanical properties were investigated. It was found that the ECABMA process was effective for the mechanical fragmentation of the magnesium chip and titanium powder into small pieces and the uniform mixture of their input materials. The extruded composite had micro-scale magnesium grains finely dispersed with refined titanium powders. It had 370 MPa-0.2% proof stress, 400 MPa-tensile strength and 10%-elongation at room temperature. The ECABMA process was effective to increase 0.2% proof stress due to the grain refinement via dynamic recrystallization.