In order to obtain high-quality products in powder metallurgy, it is important to control and understand the densification behavior of metallic powders. The effect of the powder characteristics of magnesium powders on the compaction behavior was investigated in this study by experimental and theoretical methods. A modified version of Lee-Kim's plastic yield criterion, known as the critical relative density model, was applied to simulate the densification behavior of magnesium powders, and a new approach that extracts both the powder and the matrix characteristics was developed. The model was implemented via the finite element method, and powder compaction under upsetting conditions was simulated. The calculated and experimental results are in good agreement.