The ultrafine-grained Mg-3Al-Zn alloys were successfully fabricated by the method of mechanical milling, cold press consolidation and warm extrusion. The effect of extrusion temperature on the microstructure and compression properties of the as-extruded samples has been investigated. The results indicate that with the increase of extrusion temperature from 423 K to 473 K, full dynamic recrystallization (DRX) behavior replaces partial DRX, while the average grain size increases from 246 nm to 499 nm. The uniformly dispersioned nano-MgO particles derived from mechanical milling could significantly enhance the compressive properties of as-extruded samples. The yield strength, ultimate compression strength, and fracture strain of the as-extruded alloy with an average grain size of 246 nm are, respectively, 508.0 MPa, 512.8 MPa and 9.2%. The high strength of the alloy is principally ascribed to ultrafine grained structure and nano-MgO dispersion strengthening, and the contribution ratios are 23.58% and 62.36%, respectively. (C) 2016 The Society of Powder Technology Japan. Published by Elsevier B.V. and The Society of Powder Technology Japan. All rights reserved.