AZ31 Mg-alloy with similar to 5 wt.% Cr and incorporated with CO2 during processing were produced using the disintegrated melt deposition technique. The effect of Cr addition and CO2 incorporation on the microstructural and mechanical properties was investigated after extrusion. Microstructural investigation revealed that the addition of Cr (AZ31-5Cr) significantly refined the grain size, and the incorporation of CO2 (AZ31-5Cr-CO2) resulted in the in situ formation of chromium carbide (Cr23C6) phase. The evaluation of mechanical properties indicated that when compared to the AZ31 base alloy, both AZ31-5Cr and AZ31-5Cr-CO2 showed significant improvement in the strength properties. Based on the structure-mechanical properties correlation, it was identified that in AZ31-5Cr, Cr acted as a metallic reinforcement that improved the hardness, tensile and compressive yield strengths. In AZ31-5Cr-CO2, the in situ formed Cr23C6 phase acted as a strengthening phase and enhanced the mechanical properties, which were significantly higher than those of AZ31 base alloy and AZ31-5Cr. (c) 2012 Elsevier B.V. All rights reserved.