Due to internal processing defects, bulk nanostructured Mg alloys have high strength but extremely poor ductility. A novel and facile process was designed and in-situ powder casting was initiated during spark plasma sintering. This process significantly reduced processing induced defects, enhanced inter-particle bonding and introduced significant precipitation without extra ageing treatment, leading to improvement of the compressive strength and ductility. The compressive strain of bulk sample consisting of pure cryomilled powder was 3.6% with an ultimate strength of 500 MPa, while cryomilled powder mixed with eutectic Mg-Zn alloy powder obtained a compressive strain of 6.6% and ultimate strength of 506 MPa. The ductility of the sample with mixed powder was increased by 83% without any sacrifice of strength compared to the sample consisting of only pure cryomilled powder.