By use of the Zwick electronic universal material testing machine, X-ray diffractometer, SEM, EDX, image analyzer and corrosion test, the effects of LaCl3 on the mechanical properties, structure, fractography and corrosion behavior of magnesium alloy have been studied. The results show that minute nodular Al10La2Mn7 phases can be formed in Mg melts after fluxes containing LaCl3 are added to Mg melt. The Al10La2Mn7 phases can act as the nucleating site of γ phases, and the γ phases can be refined. With the flux containing 5% LaCl3, the σb and δ of the Mg alloy can be improved from 161MPa and 2.1% to 203MPa and 4.0% by 26% and 100%, respectively. The corrosion rate of magnesium alloys can decrease from 1.10 mg/(cm2.d) to 0.17 mg/(cm2.d) by 84% with the use of flux containing 5% LaCl3. Rare earth (RE) elements are often added to the magnesium alloy to improve the alloy structure and the room or elevated temperature mechanical properties. But up to present, the RE elements added to Mg melt is often in the form of pure RE alloy or RE master alloy . Because RE is the oxidizable material, this kind of adding process often leads to low RE utilization ratio and high use-cost. Besides, this process can easily induce segregation of RE and the appeared coarse RE phases will lower the Mg alloy mechanical properties. By far, there is few research reports about RE contained compound added to Mg alloy melt. In this paper, the effects of Lanthanum chloride (LaCl3) on the structure and mechanical properties of Mg alloy are studied for the first time. The aim is to explore a new way to improve the Mg alloy properties.