Segregation bands which normally follow the outer contours of a casting are common in commercial magnesium alloy pressure die castings. Several models have been proposed in the literatures which attempt to explain mechanisms behind the formation of this type of segregation bands. However, it is difficult to explain some phenomena which occur in real die cast components. In this paper, a new theory concerning the formation of one common and detrimental segregation band defect (Type I) has been proposed, which is based on a coupled analysis of heat flow and volume changes during solidification. The formation of this type bands was related to a pressure drop in the liquid and resulting flow of segregated liquid from the surrounding two-phase regions. Mechanism on the formation of the other type segregation band (Type II or under surface band) is also proposed. The sudden increase of cooling rate at the moment of applying intensification pressure is believe to has main contribution to the formation of this type of bands.