Semi-solid powder rolling (SSPR) is a novel strip manufacturing process which combines the features of semi-solid rolling and powder rolling. SSPR involves rolling procedure of metallic alloy powders when both liquid and solid phases coexist. In this study, densification process and deformation mechanisms of AA7050 powder in the presence of liquid phase were investigated. The relationships between the apparent plastic Poisson's ratio and the relative density as well as the thickness reduction ratio and relative density were calculated. The relationship between deformation strain and relative density was calculated as well. The experimental data of relationship between rolling forces and relative density were achieved. The results show that the densification process of SSPR also can be divided into three stages and liquid phase mainly affects stage I. In stage I, semi-solid particles' rearrangement and restacking are the main densification mechanisms when the initial liquid fraction is lower than 20 pct. When the initial liquid fraction is higher than 20 pct, flowing and filling of liquid, semi-solid particles rearrangement and restacking are the densification mechanisms. In stage II, severe deformation of particles associated with a rapid increase in the apparent plastic Poisson's ratio and interparticle contact area contributes to the densification process. In stage III, the densification mechanisms are the deformation and collapse of isolated pores. The calculated deformation strain increases gradually with the same slopes as the relative density increases in stages II and III no matter how much the liquid fraction is. Higher liquid needs less deformation degree that contributes to the densification.