Tested Al-5Co and Al-5Mg-5Co materials were manufactured using a common ingot metallurgy (IM) and rapid solidification (RS) methods combined with mechanical consolidation of RS-powders and hot extrusion procedures. Mechanical properties of as-extruded IM and RS alloys were tested by compression at temperature range 293-773 K. Received true stress vs. true strain curves were typical for aluminum alloys that undergo dynamic recovery at high deformation temperature. It was found that the maximum flow stress value for Al-5Mg-5Co alloy was much higher than that for Al-5Co, both for IM and RS materials tested at low and intermediate deformation temperatures. The last effect results from the solid solution strengthening due to magnesium addition. However, the addition of 5% Mg results also in the reduction of melting temperature. Therefore, the flow stress for Al-5Mg-5Co alloy was relatively low at high deformation temperatures. Light microscopy observations revealed highly refined structure of RS materials. Analytical transmission electron microscopy analyses confirmed Al9Co2 particles development for all tested samples. Fine acicular particles in RS materials, ∽1μm in size, were found to grow during annealing at 823K for 168h. As result, the hardness of RS materials was reduced. It was found that severe plastic deformation due to extrusion and additional compression did not result in the fracture of fine particles in RS materials. On the other hand, large particles observed in IM materials (∽20μm) were not practically coarsened during annealing and related hardness of annealed samples remained practically unchanged. However, processing of IM materials was found to promote the fracture of coarse particles that is not acceptable at industrial processing technologies.