Disclosed is a process for producing a (rare earth)-Mg-Ni-based hydrogen storage alloy that enables the production of a nickel hydrogen secondary battery having excellent cycle properties and high capacity, in a safe and industrially advantageous manner. Specifically disclosed is a process for producing a (rare earth)-Mg-Ni-based hydrogen storage alloy that contains an element (A), Mg and an element (B), wherein the element (A) comprises at least one element (R) selected from rare earth elements including Sc and Y and at least one arbitral element selected from Zr, Hf and Ca, the element (B) comprises Ni and at least one arbitral element other than the element (A) or Mg. The process comprises: a first step of mixing an alloy comprising the element (A) and the element (B) with metal Mg and/or an Mg-containing alloy having a melting point equal to or lower than that of metal Mg to produce a mixture; and a second step of heating the mixture at a temperature that is lower by 5 to 250 DEG C than the melting point of the finished (rare earth)-Mg-Ni-based hydrogen storage alloy for 0.5 to 240 hours.