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Magnesium hydride (MgH₂) holds immense promises as a cost-effective hydrogen storage material that shows excellent storage capacity suitable for fuel cell applications. Due to its slow hydrogen charging/discharging kinetics and high apparent activation energy of decomposition, MgH₂ is usually doped with one or more catalytic agents to improve its storage capacity. So often, milling the metal hydride with proper amounts of catalyst leads to heterogeneous distribution of the catalytic agent(s) in MgH₂ matrix. The present work proposes a cost-effective process for doping Mg powders with Zr₂Ni particles upon ball milling the powders with Zr₂Ni-balls milling media under pressurized hydrogen. Fine Zr₂Ni particles were gradually eroded from the balls and homogeneously embedded into the milled powders upon increasing the ball milling time. As a result, these fine hard intermetallic particles acted as micro-milling media and leading to the reduction the Mg/MgH₂ powders. Meanwhile, Zr₂Ni eroded particles possessed excellent heterogeneous catalytic effect for improving the hydrogenation/dehydrogenation kinetics of MgH₂. This is implied by the short time required to absorb (425 s)/desorb (700 s) 6.2 wt% H₂ at 200 °C and 225 °C, respectively. The as-milled MgH₂ with Zr₂Ni balls possessed excellent cyclability, indexed by achieving continuous 646 cycles in 985.5 h (~1.5 cycle per hour) without serious degradation.