A new solid-state hydrogen storage system of magnesium hydride (MgH2) doped with 5 wt% of metallic glassy (MG) zirconium palladium (Zr2Pd) nanopowder was fabricated using a high-energy ball milling technique. The end-product obtained after 50 h of milling was consolidated into bulk buttons, using a hot-pressing technique at 350 °C. The results have shown that this consolidation step, followed by the repetitive pressing at ambient temperature did not affect the nanocrystalline characteristics of pressed powders. Recycling pressing demonstrated beneficial effects of plastic deformation and lattice imperfections on Mg, leading to its enhanced hydrogenation/dehydrogenation kinetics and cycle-life-time performance compared with untreated samples. The results elucidated that spherical, hard, nanopowder of MG-Zr2Pd were forced to penetrate the Mg/MgH2 matrix to create micro/nanopore structures upon pressing for 50 cycles. These ultrafine spherical metallic glassy particles (∼400 nm in diameter) acted as a micro-milling media for reducing the particle size of MgH2 powders into submicron particles. In addition, they played a vital role as grain growth inhibitors to prevent the undesired growth of Mg grains upon the application of a moderate temperature in the range of 50 °C to 350 °C. The apparent activation energy for the decomposition of this new consolidated nanocomposite material was measured to be 92.2 kJ mol−1, which is far below than the measured value of pure nanocrystalline MgH2 powders (151.2 kJ mol−1) prepared in the present study. This new binary system possessed superior hydrogenation kinetics, indicated by the rather low temperature (200 °C) required to uptake 6.08 wt% H2 within 7.5 min. More importantly, the system revealed excellent dehydrogenation kinetics at 225 °C as implied by the limited time needed to release 6.1 wt% H2 in 10 min. The MgH2/5 wt% MG-Zr2Pd system showed a high performance for cyclability, implied by the achievement of continuous cycles (338 cycles) at 225 °C without degradation over 227 h.