There is less study about the effect of magnesium on characteristics of bearing. In the paper, the bearing steel was modified by three types of Al-Mg alloys. Firstly, the total oxygen content value was measured, and then the inclusion size, shape and chemical composition were analyzed by optical microscopy, SEM and EDX. The results show that, after treated by Al-Mg alloy, the total oxygen content descends remarkably and the alumina inclusion with big size and different shapes transform into spinel with small size and spherical shape. The optimal effect of inclusion modification is acquired after treated by NO. 3 Al-Mg alloy containing 16.55 wt% Mg, most of the inclusions in steel are spinel and magnesia, and the size of 96.23 wt% inclusions is less than 3μm.