Mg3Sb2 with a structure of A-type rare earth oxide (hexagonal) was synthesized by mechanical alloying (MA) and evaluated as a negative electrode material for rechargeable lithium batteries. Electrochemical tests demonstrated that the initial charge and discharge capacities of Mg3Sb2 were ca. 850 and 600mAhg−1, respectively. Ex situ XRD of the Mg3Sb2 electrodes showed that several lithium-containing compounds such as LiMgSb and Li3Sb were successively formed during the insertion of lithium into Mg3Sb2. As to LiMgSb synthesized by MA-method, the electrode performance was also investigated; it showed an excellent reversibility at the first cycle and a rechargeable capacity of ca. 200mAhg−1 after the fourth cycle. The cycle life performance of LiMgSb electrode was significantly enhanced in comparison with that of Mg3Sb2.