Recently, since the demand of rare earth permanent magnet for high temperature applications such as an electric motor has increased, dysprosium (Dy), a heavy rare earth element, is becoming important due to severe bias in its production. To fulfill the increasing need of Dy, recycling offers as a promising alternative. In recycling of rare earths, Hydro-metallurgical extraction method is mainly used however it has adverse environmental effects. Liquid metal extraction on the other hand, is an eco-friendly and simple method as far as the reduction of rare earth metal oxide is concerned. Therefore, liquid metal extraction was studied in this research as an alternative to the hydro-metallurgical recycling method. Magnesium (Mg) is selected as solvent metal because it doesn’t form intermetallic compounds with Fe, B and has a low melting and low boiling point. Extraction behavior of Dy in (Nd,Dy)-Fe-B magnet is observed and effect of Mg ratio on extraction of Dy is confirmed.