A method for recycling AZ91D magnesium alloy scraps directly by hot extrusion was studied. Various microstructural analyses were performed using the techniques of optical microscopy, scanning electron microscopy (SEM) and energy dispersive spectroscopy(EDS). Microstructural observations revealed that all the recycled specimens consisted of fine grains due to the dynamic recrystallization. The main strengthening mechanism of the recycled specimen was grain refinement strengthening and homogeneous distribution of oxide precipitates. The interfaces of individual scraps of extruded materials were not identified when the scraps were extruded with the extrusion ratio of 40:1. Oxidation layers of the scraps were broken into pieces by high compressive and shear forces under the extrusion ratio of 40:1. The ultimate tensile strength and elongation to failure increased with increasing the extrusion ratio. Recycled specimens with the extrusion ratio of 40:1 showed higher ultimate tensile strength of 342.61 MPa and higher elongation to failure of 11.32%, compared with those of the cast specimen.