A gas atomised AZ91 powder has been consolidated by Spark Plasma Sintering (SPS) at different temperatures in the range of 310 °C–500 °C. The influence of the sintering temperature on the Al12Mg17 precipitation and the grain size was investigated through XRD, SEM and EDX analyses. The use of SPS on a metastable powder was demonstrated to be an effective processing route to control the precipitation process while keeping fine grains. Through the estimation of the Hall-Petch and Orowan strengthening, the benefit of this fine microstructure was quantified and the Hall-Petch contribution was revealed predominant. As a consequence for all sintering conditions, the values of resulting hardness (70–90 HV) and Yield Compressive Strength (YCS) (148–230 MPa) were equal or superior to those of the conventional cast AZ91 alloy in its aged T6 condition. The optimum microstructure was obtained for a sintering temperature of 380 °C, for which maximum values of Ultimate Compressive Strength (UCS) and strain at UCS were measured (327 MPa and 13.7%, respectively). These values correspond to an increase by 16% and 11% in comparison to the heat treated cast AZ91-T6 alloy. As for the hardness and YCS at this sintering temperature, they are 8% and 49% higher than those of the cast AZ91-T6 alloy. The study also highlighted that the lack of ductility under tensile testing remains an issue for Mg alloys processed by SPS.