The Mg-Al series alloys are well known for their low density, high specific strength, and superior damping capability. However, the application of Mg-Al series alloys is often limited by inadequate mechanical properties. To fulfill the growing demand for lightweight structural components, ultra-fine grained magnesium alloys with superior mechanical properties have gained attention. Mechanical milling and powder metallurgy were used to produce the AZ61 ultra-fine grained magnesium alloy with super-high tensile characteristics. The effects of mechanical milling on the grain size, precipitates, texture, and tensile properties of AZ61 ultra-fine grained magnesium alloy were investigated. The grain size of the AZ61 alloy produced by mechanical milling and powder metallurgy was reduced from 0.91 μm to 0.68 μm when compared to that produced by non-mechanical milling. Mechanical milling accelerated the dynamic precipitation and refining of Mg₁₇Al₁₂ while weakening the basal texture. The yield strength, tensile strength, and elongation of AZ61 ultra-fine grained magnesium alloy are 393.1 MPa, 431.9 MPa, and 8.5%, respectively, which are superior to the AZ61 alloy produced by other processes. The theoretical grain refinement and Orowan strengthening mechanisms of AZ61 alloy were calculated, and it shows that the grain refinement strengthening contributes more than 90% of the yield strength. The Orowan strengthening was overestimated when Mg₁₇Al₁₂ was distributed at grain boundaries. The weakening of basal texture resulted in a reduction in yield strength. The fracture mechanism of the AZ61 alloy without mechanical milling is dominated by oxidation on the surface of the AZ61 powder, which initiates interparticle debonding. The fracture mechanism of the AZ61 alloy with mechanical milling is dominated by deformation mismatch between the deboned powders and the stronger bonded powders, and the increase in the amount of Mg₁₇Al₁₂ along the grain boundary.