Because of the high energy density, easy ignition, and good storability, mechanically alloyed Al·Mg powder has the potential to improve the performance characteristics of various energetic and gas-generating materials. Here, the use of this powder in combustible mixtures for generation of oxygen and hydrogen is explored. The mixtures for oxygen generation consisted of sodium chlorate, nanoscale cobalt oxide catalyst, and Al·Mg powder, while those for hydrogen generation included water, polyacrylamide as a gellant, and Al·Mg powder. To increase hydrogen yield, ammonia borane (NH3BH3) was also added to Al·Mg − water mixtures. Combustion experiments were conducted in an argon environment, using laser ignition. The thermal wave propagation over the oxygen-generating mixtures was studied using infrared video recording. It has been shown that mechanically alloyed Al·Mg material is a promising alternative to currently used iron because significantly smaller amounts of this additive are needed for a steady propagation of the combustion wave. The hydrogen generation experiments have shown that mixtures of mechanically alloyed Al·Mg powder with 10−60 wt% gelled water are combustible, with the front velocities exceeding the values obtained for the mixtures of water with nanoscale Al. Hydrogen yield was measured using mass-spectrometry. In the mixtures that included ammonia borane, D2O was used instead of H2O. Measurements of H2, D2, and HD concentrations in the product gas provided insight into the reaction mechanisms. The isotopic tests have shown that AB participates in two parallel processes − thermolysis and hydrolysis, thus increasing hydrogen yield.