The formulation design and fundamental experiments of O/W type emulsions as lubricant and coolant in the hot rolling process of magnesium alloy were conducted in this work. The main components of emulsion were determined by the comparision of some candidates of base oil, polar oil additive and emulsifier in microstructure and properties, respectively. It is found that the conservation stability of emulsions is mainly dominated by the emulsifier concentration and type. The results showed that the suitable stability and microstructure was obtained by using compound emulsifier of nonionic and anionic surfactants. The feasible contents of both emulsifier and polar agents are about 10 percent, respectively.