Activated aluminum powder has been used to extract lithium from Mg-Li mixed solution via a hydrolysis–adsorption reaction. First, activated aluminum powder was prepared under the optimal conditions of NaCl addition of 70%, ball-milling time of 3 h, and ball-to-powder mass ratio of 20:1. Then, the activated aluminum powder was added into the Mg-Li mixed solution to extract lithium. X-ray diffraction analysis indicated that Li+ was adsorbed by freshly formed Al(OH)3 in the form of LADH-Cl [LiCl·2Al(OH)3·mH2O]. Under the optimal conditions of reaction time of 3 h, Al/Li molar ratio of 4:1 for activated aluminum powder addition, and reaction temperature of 70°C, lithium precipitation exceeded 90% while magnesium precipitation was controlled at 13%. These results indicate that activated aluminum powder can efficiently extract lithium from Mg-Li mixed solution via a hydrolysis–adsorption reaction.