The current Kroll method used to produce sponge titanium utilizes a process cycle of magnesium metal and chlorine gas via the electrolysis of magnesium chloride. The main issues are the high capital cost of the electrolysis process and the environmental regulations limiting high chloride concentrations. Thus, the authors have developed a conceptual method involving the pyrolysis of magnesium chloride as well as a reduction process which allows for a cycle of magnesium and chloride. The magnesia obtained in this process can be used to prepare magnesium metal through a thermal reduction method. This paper has studied the pyrolysis of magnesium chloride in detail, which is the key part of this new Mg-Ti cycle method. By plotting Mg-O-Cl predominance diagram, the conditions in which MgO stably exists can be found. The experiments show that the optimum reaction conditions are as follows: pyrolysis temperature 1200 oC, pyrolysis oxygen partial pressure 0.1 MPa and pyrolysis time 50 min. The pyrolysis rate of molten MgCl2 can reach 99.99% and the chlorine content in the product is 0.00262% under the optimum conditions. The obtained MgO powder was analyzed by XRD and SEM. These MgO powders, showing an irregular hexahedral shape, have an average diameter of 1 μm with uniform size distribution, good dispersity and high crystallinity and purity.