Magnesium hydride particles are suspended in an oil-based medium with dispersants to create a slurry that has great potential for hydrogen production and storage. Hydrogen is generated whenever needed by mixing the magnesium hydride slurry with water in a mixer. The byproduct is benign magnesium hydroxide (milk of magnesia). The primary purpose of the slurry is to moderate the reaction, allow thermal management and make it pumpable so it can be transported and metered like liquids so that the existing transportation infrastructure can be used. Thus, the magnesium hydride slurry lends itself well for automotive applications in conjunction with fuel cells. For such large-volume automotive applications, the success and economic viability of employing magnesium hydride slurry to transport and store hydrogen will depend on developing an effective recycling system for the magnesium hydroxide by-products. This paper discusses the feasibility of employing the Solid-Oxide-Oxygen-Ion-Conducting-Membrane (SOM) process for converting the by-product magnesium hydroxide to magnesium and regenerating the magnesium hydride slurry. The SOM process, in principle, utilizes a tubular yttria-stabilized-zirconia-based solid-oxide-fuel-cell as an anode in the temperature range 1100 – 1300 °C. The magnesium hydroxide is dissolved in a molten ionic flux and with the application of an electrical potential between an inert cathode in the flux and the anode, the oxygen ions are pumped out of the flux through the zirconia membrane and are oxidized at the anode. Magnesium vapor evolves at the cathode and is condensed in a separate chamber (condenser). By performing in-situ reforming of gaseous hydrocarbons within the tubular zirconia anode one can minimize the electrical power required for the electrolysis and generate the required hydrogen needed to convert the magnesium vapors in the condenser back to magnesium hydride.