A method for recycling ZM6 magnesium alloy chips and Mg-Ce alloy chips by hot extrusion was studied. Effect of extruding times on microstructure and mechanical properties of the alloy was analyzed and the fracture behavior was discussed. The results indicate that after the first extrusion, tensile strength and elongation to failure of the alloy are very low because Mg-Ce intermediate alloy chips have not been broken. Tensile strength and elongation to failure of the alloy are obviously improved because of well-proportioned distribution of Mg-Ce intermediate alloy chips after the fifth extrusion. Ultimate tensile strength and elongation to failure of the alloy increase with the extrusion times increasing. Increasing range decreases with the extrusion times increasing. After the fifth extrusion, ultimate tensile strength and elongation to failure of the alloy are 300 MPa and 14.8%, respectively. Fracture mode of the specimen is transgranular dimple fracture.