The automotive, biomedical, and aerospace industries are among those with a rising need for lightweight materials with enhanced mechanical and tribological qualities. Composites based on magnesium alloys have attracted interest because of their excellent strength-to-weight ratio and promise to improve component performance. Magnesium (Mg) alloy-based composites find applications in sports and leisure equipment, aerospace, biomedical implants, and more. The research outlined here serves a critical need in the field of materials science and engineering, particularly regarding the development of advanced magnesium (Mg) alloy-based composites. In this study, we have created a new aluminum composite using the AZ31 alloy mixed with 5% boron carbide (B4C) and 5% molybdenum disulfide (MoS2) as reinforcement through a powder metallurgical technique. The magnesium alloy contains 3% aluminum and 1% zinc. Our research aims to understand the mechanical and tribological behaviors and the impact of Electrical Discharge Machining (EDM) process parameters on AZ31 magnesium alloy. We need to modify these properties for various applications. Many industrial researchers have studied the machinability of magnesium alloys using EDM. We conducted wear tests on AZ31 alloy reinforced with both B4C and MoS2 in altered quantities using a pin-on-disc setup. The outcome displays that the wear resistance of these composites is considerably better matched to other magnesium matrix composites (MMCs). We also measured various densities of the hybrid composite, including apparent density, green density, and sintered density, which were found to be 0.839, 1.495, and 1.504 g/cm3, respectively—better than other composites. In addition, the hybrid composite exhibited a substantial increase in micro hardness, reaching 22.012 HV, indicating improved wear resistance of the material. Comparatively, low density, minimum wear profile, and maximum hardness were recorded for the sample of AZ31 + 5%MoS2 + 5%B4C. The influence of EDM parameters was discussed.