The production of fully dense nanocomposites with a homogeneous distribution of nanoparticles through powder metallurgy (PM) techniques is challenging. Additionally to mechanical milling, pressing and sintering, a final consolidation process is needed to fully densify the nanocomposite. Hot isostatic pressing (HIP) is a promising alternative method to other hot forming processes to eliminate porosity in these PM parts. In contrast to hot extrusion, for instance, isotropic properties are achieved, and textures, as they are usually observed in Mg after uniaxial deformation, are avoided. Here, we evaluate the effect of HIP on the densification, microstructure and (nano)hardness of Mg-SiC nanocomposites. Even though density increased indeed, we observed no increase in the mechanical properties, due to significant heterogeneity in the microstructure. SiC-free regions with a higher grain size developed. Local nanohardness measurements of the HIPed Mg nanocomposite revealed that these regions had a significantly lower nanohardness than the SiC-containing regions. Under consideration of mechanisms reported to be active in Mg in the pressure and temperature regime we used, we conclude that grain growth is the most likely mechanism leading to the microstructure observed after HIP. This is driven by the thermodynamic pressure to decrease the grain boundary energy and facilitated by a slightly inhomogeneous distribution of SiC nanoparticles in the sintered nanocomposite.