In the present work, optimization of powder metallurgy process parameters, i.e., compaction pressure, sintering time, and sintering temperature, for magnesium alloy AZ91 is done using Taguchi Design of Experiment and ANOVA techniques. Regression equation for determining ultimate compressive stress and hardness of AZ91 Magnesium alloy was formulated and validated experimentally. Out of the nine sets of parameters present in the current design, H8 (450 MPa compaction pressure, 450° sintering temperature, and 60 minutes sintering time) was found to be the best set of parameters for both the hardness and ultimate compressive stress. Still, the optimum set of parameters was not present in the current design of experiments. The optimum set of parameters obtained after analyzing the main effect plots for means is a combination of 450 MPa compaction pressure, 450° sintering temperature, and 90 minutes of sintering time. The optimum value of hardness and ultimate compressive stress obtained from the regression equations is 81.81 Hv and 138.90 MPa, respectively. Experimental value of ultimate compressive stress and hardness for samples processed at optimal parameters is 144.89 MPa and 82.12. Compression test results obtained from regression analysis are 4.31% less than the experimental results. Micro-hardness results obtained from regression analysis are 0.4% less than the experimental results. This shows that the regression analysis results are in good agreement with experimental results.