Machined chips of AZ31B magnesium alloy were consolidated by cold pressing and then hot extruding under different processing temperatures and extrusion ratios. Being compared with ingot extruding alloy, the influences of processing technology on mechanical properties were analyzed from two main aspects that involving the dynamic recrystallization microstructure and the bonding condition between chips. With the increasing extrusion temperature, the ultimate tensile strength and elongation to failure of the recycled alloys firstly increase and then decrease. The combined action of grain growth and improvement of the bonding between chips with the increasing extrusion temperature results in the variations of mechanical properties of the recycled alloy. With the increasing extrusion ratio from 4:1 to 44:1, grain is refined, and the bonding between chips is enhanced. This contribute to the increased ultimate tensile strength of recycled alloy. Whereas elongation to failure decrease when extrusion ratio is higher than 25:1 due to the significant deformation strengthening.