Mg81Ni19-8wt.% REO (oxides of Lanthanum and Cerium) alloys were successfully prepared using mechanical alloying method with Mg-Ni alloy and REO powder. Phase analysis, structural characterization, and microstructure imagine of the alloys were conducted using X-ray diffraction (XRD), metallurgical microscope, and transmission electron microscopy (TEM) methods. Multi-phase structures, including the primary phase of Mg2Ni and several secondary phases of Mg + Mg2Ni, MgNi-LaO, and MgNi-CeO, were found in in the as-cast Mg81Ni19- 8wt.% REO alloys. XRD and TEM results showed that Ce exhibits variable valence behavior at various stages, and the addition of REO promotes the nanocrystalline of the alloy. The hydrogen absorption capacity of ball-milled Mg81Ni19 and Mg81Ni19- 8wt.%REO alloy for 2 h at 343 K is 1.34 wt.% and 1.83 wt.%, which are much larger than 0.94 wt.% of as-cast Mg81Ni19 alloy. The addition of REO led to a decrease of the thermal decomposition temperature of the alloy hydride by approximately 20 K and a reduction of the activation energy of the hydrogen desorption reaction by 10% and 13%, respectively.