A raw magnesium alloy powder material having a relatively small crystal grain diameter is obtained by subjecting a starting material powder having a relatively large crystal grain diameter to a plastic working in which the powder is passed through a pair of rolls to undergo compressive deformation or shear deformation. The starting material powder is a magnesium alloy powder having a fine intermetallic compound (21) precipitated and dispersed in a base (22) by a heat treatment. A work strain (22) is formed around the precipitated intermetallic compound (21) in the magnesium alloy powder after processed by the plastic working. The magnesium alloy powder after processed by the plastic working has a maximum size of 10mm or less and a minimum size of 0.1mm or more, and the magnesium particle constituting the base (20) has a maximum crystal grain diameter of 20 µ m or less.