The effects of extrusion passes on the microstructure and mechanical properties of the magnesium AZ31-Ce alloy prepared by solid-phase synthesis were studied. The deformation mechanism of Mg-Ce chips was also discussed. The alloy was characterised by optical microscopy, scanning electron microscopy, energy-dispersive X-ray spectrometry and an electronic universal strength tester. The results show that Mg-Ce chips are constantly crushed and deformed, and finally exhibit a fine granulated shape as the number of extrusion passes increases. The mechanical properties of the alloy markedly increase with further extrusion passes. After five passes, the tensile strength and elongation reach 311 MPa and 9.83%, respectively. The solid-phase synthesis method has the potential to prepare wrought magnesium alloys with rare earth alloying additions.