In this work, the binary Ni–Mg–O oxide system was prepared by means of a sol–gel technique, which provides high dispersity and uniform distribution of the nickel species within the MgO matrix. The samples were characterized by a scanning electron microscopy, a low-temperature nitrogen adsorption, and X-ray diffraction analysis. The reducibility of the prepared samples was tested in the reduction/oxidation cycles, thus modeling the conditions of a chemical looping. It was found that during the preparation procedure, a partial substitution of Mg2+ ions with Ni2+ ions resulting in formation of solid solution takes place. Reduction of the as-prepared sample in a temperature-programmed regime with heating up to 700 °C leads to decomposition of the solid solution and formation of dispersed particles of metallic nickel of 7 nm in size finely distributed within the MgO matrix. Subsequent oxidation transforms Ni0 species into NiO nanoparticles. Starting from the second reduction/oxidation cycle, the binary Ni–Mg–O system shows the reproducible behavior, and thus can be considered as a chemical looping agent. [Figure not available: see fulltext.].