A global increase in the demand for magnesium and its alloys has put increased pressure on magnesium's natural sources (magnesium ores) due to its high strength-to-weight ratio and environment-friendly nature. Therefore, it has become necessary to look for efficient recycling techniques for magnesium and its alloys. Powder metallurgy proved to be very efficient compared to conventional recycling techniques for the recycling of aluminum, copper, and other alloys. In the present work, an experimental study was done to see the suitability of powder metallurgy for recycling magnesium and its alloy. Optimization of process parameters (compaction pressure, sintering temperature, and sintering time) was done with respect to AZ91 magnesium alloy's sintered density because almost all the properties (i.e., physical, mechanical, electrical, thermal, etc.) of a powder metallurgy product are dependent on the sintered density. Sintered density is dependent on the extent of diffusion and the thermal expansion in the material. And the extent of diffusion and the thermal expansion depends on the compaction pressure, sintering temperature, and sintering time. After experimental and statistical investigations, it was observed that compaction pressure is the most influencing parameter. The optimum set of process parameters was found out to be a combination of compaction pressure of 450MPa, the sintering temperature of 723K, and sintering time of 2h.