Application of magnesium alloys potentially plays a key role in weight reduction of automotive and aerospace components. Majority of magnesium components are manufactured via the high-pressure die-casting (HPDC) or permanent-mold casting (PMC) processes. In general, castability of magnesium alloys is comparable to aluminum alloys. However, unique defects related to the high susceptibility of magnesium to rapidly solidify, dissolve hydrogen or form oxides potentially contribute to material failure. In this research, AE42 magnesium alloy castings were manufactured via the PMC process. Formation of fold defects in regions of high melt turbulence was observed on the macro-scale as visible surface flow-lines. Microstructural analysis revealed that folds in the AE42 alloy we related to the rapid solidification and short alloy freezing range. Further, segregation of Al2RE intermetallics at the metal front hindered proper fusion of merging metal fronts.