Adding aluminum to propellants, pyrotechnics, and explosives is a common way to boost their energy density. A number of approaches have been investigated that shorten aluminum ignition delay, increase combustion rate, and decrease the tendency of aluminum droplets to agglomerate. Previous work showed that particles of mechanically alloyed Al-Mg powders bum faster than similarly sized particles of pure aluminum. However, preparation of mechanically alloyed powders with particle sizes matching those of fine aluminum used in energetic formulations was not achieved. This work is focused on preparation of mechanically alloyed, composite Al-Mg powders in which both internal structures and particle size distributions are adjusted. Binary powders with compositions in the range of 50-90 at. % Al were prepared and characterized. Milling protocol is optimized to prepare equiaxial, micron-scale particles suitable for laboratory evaluations of their oxidation, ignition, and combustion characteristics. Quantitative particle size analyses are done using low-angle laser light scattering. Electron microscopy and x-ray diffraction are used to examine particle morphology and phase makeup, respectively. Combustion of aerosolized powder clouds is studied using a constant volume explosion setup. For all materials, ignition and combustion characteristics are compared to each other and to those of pure Al. Compositions with improved performance (i.e., shorter ignition delay and faster pressurization rate) compared to pure Al are identified.