Magnesium alloy (AZ31) reinforced with carbon nanotubes (CNTs) and grapheme nanoplatelets (GNPs) were fabricated with the method of hot-pressing sintering and hot extrusion processes. GNPs and CNTs were predispersed with Al and Zn powders by ball milling used as precursor for sintering, which effectively guaranteed the integrity and dispersion of them. The microstructure and mechanical properties of the composites (denoted as Mg–3 wt% Al–1 wt% Zn–1 wt% (xCNTs + yGNPs)(x:y = 1:1, 1:2, 1:3) were investigated. The results show that the CNTs and GNPs are uniformly distributed in the matrix and closely combined with the matrix in nanoscale. Among the tested composites, Mg–3 wt% Al–1 wt% Zn–1 wt% (xCNTs + yGNPs)(x:y = 1:2) exhibits the most favorable mechanical properties, and the yield strength, tensile and compressed strength, and elongation of composites are substantially improved by the addition of 0.33 wt% CNTs and 0.67 wt% GNPs. Novel strengthening mechanisms such as three-dimensional reinforced structure formed by CNTs and GNPs are found for the remarkable improvement in mechanical properties.