Nanocrystalline Mg and MgH2 samples have been prepared by high-energy ball milling and gas phase condensation methods. Starting from these materials in their "as received" state without air exposure, a study of the oxygen and air passivation behaviour was carried out by "in situ" analysis of the samples by X-ray photoelectron spectroscopy (XPS) and transmission electron microscopy (TEM). The binding energy and photoemission Auger parameters have been determined for metallic magnesium as well as for magnesium hydride, oxide and hydroxide species. Values of the MgH2 material were reported for the first time. The study clearly shows the formation of an oxide passivation layer of ca. 3-4 nm in thickness for all the nanocrystalline magnesium samples handled under controlled inert gas atmospheres. A hydroxide like amorphous layer is formed at the topmost surface layers of the nanocrystalline Mg and MgH2 samples. The implication of these studies for H-2 storage and transport applications of nanocrystalline magnesium is discussed. (c) 2005 Elsevier B.V. All rights reserved.