In this study, the thermal stability of nanostructured Al-Mg alloy powders was investigated. Two alloy compositions, Al-5Mg-0.1Er and Al-5Mg-0.5Er (wt.%), were cryogenically milled for 30 h to produce nanostructured powders. The microstructure of the milled powders with increasing temperature was investigated by differential scanning calorimetry (DSC) with one-hour annealing performed at selected temperatures followed by X-ray diffraction (XRD) and electron microscopy analysis. Prolonged milling led to significant oxygen pick-up in the powders. The Al-5Mg-0.1Er powders experienced grain growth typical of cryomilled Al-Mg powders, while the Al-5Mg-0.5Er alloy showed improved thermal stability. An average grain size of ∼20 nm was observed up to 400 ∘ C (∼0.8 ) in the Al-5Mg-0.5Er powders, and abnormal growth at 550 ∘ C resulted in a maximum observed grain size of 234 nm. Thermal stability in the Al-Mg-Er powders is attributed to the combined effects of solute/impurity drag and second-phase pinning (nanoscale oxides, nitrides, and oxynitrides) that impede grain boundary motion.