New Mg–O–9Al alloy has been developed by the dispersion of oxygen atoms in the Mg–9Al alloy in which oxygen atoms are supplied from the decomposition of TiO2nanoparticles in the Mg–9Al alloy melt. The dissolved oxygen atoms expand the lattice structures of both α-Mg and β-phase, inducing the reduced mismatch distance between α-Mg and β-phase. Therefore, yield stress of the Mg–O–9Al alloy is 143 MPa, much higher than 110 MPa in the Mg–9Al alloy. Fracture toughness values of 10.39 MPa m1/2and 12.86 MPa m1/2for both the Mg–9Al and Mg–O–9Al alloys are also respectively obtained. The crack propagates along the weak interface of β-phase in the Mg–9Al alloy. On the other hand, the β-phase disturbs the crack propagation route in the Mg–O–9Al alloy, showing many broken β-phases. Therefore, the improved interfacial feature with an addition of dissolved oxygen atoms in the Mg–O–9Al alloy results in much enhanced mechanical properties.