Accumulated metal waste during machining of aluminum alloys is considered for further recycling to promote environmentally sustainable production. This study aims to characterize the ball-milling process of AA2024 aluminum chips as an alternative to the remelting procedure. The proposed processing modes provide a powder particle size distribution with a d50 of 100–325 μm after 100 min milling. Stearic acid, as a process control agent (PCA), slows down powder refinement if introduced at the early stages of milling. The powder tends to form a flake-shaped morphology owing to the impact of plastic deformation altered by the PCA. Microhardness variation is linked to the joint effect of voids, strengthening phases, mechanically affected zones, and grain structure. Further, the paper reports the crystallite sizes ranging from 25 nm to 45 nm and the lattice strain < 1%. Finally, an outlook on hot-powder compaction and the associated properties of the material are presented.