The present paper describes a new technology to manufacture nanocrystalline materials of ZK60 alloys via studying the influence of hydride temperature, hydrogen pressure and reaction time of the HDDR process on the course of hydrogen-desorption, By the means of XRD, OM, SEM and TEM technique, the microstructural evolution of magnesium alloy was researched. Experimental results show that the temperature plays an important role in the hydrogen-desorption process of ZK60 alloy. In the optimal HD process for preparing nanocrystalline Mg alloy powders is that the alloy is hydrogenated at temperature of 350℃ under 2MPa hydrogen pressure for 12 hours and then dehydrogenated at 350℃ for 3 hours in vacuum. As a result, the grain sizes of ZK60 alloy were refined to about 20nm from 160mm.