In this study, we investigated the changes in physicochemical properties, yeast diversity, and volatile flavor compounds during fermentation of mugwort sugar extracts (FMSE). The pH and sucrose levels decreased, while the acidity and reducing sugar, fructose, and glucose contents increased during FMSE. Oxalic and succinic acids appeared to be the predominant organic acids in FMSE. Based on 26S rRNA sequencing, a total of 7 different yeast species including Candida lactis-condensi, Hanseniaspora uvarum, Hyphopichia burtonii, Saccharomyces cerevisiae, Saccharomyces paradoxus, Torulaspora delbruechii, and Zygosaccharomyces pseudorouxii were identified in 5 sampling sites. The prevalence of S. cerevisiae was highest (95%) at 30 days and decreased to 7.5% at 60 days, whereas the abundance of C. lactis-condensi increased from 90% at 60 days to 100% at 90 days of fermentation. The major volatile flavor compound, 3-methyl-1-butanol, considerably increased from 65.95% to 82.98% after 30 days of fermentation and slightly decreased thereafter. In addition, the levels of benzyl alcohol, phenylethyl alcohol, and 5-hydroxymethyl-2-furancarboxyaldehyde increased to 2.56%, 5.48%, and 2.54%, respectively, whereas isopentyl alcohol substantially decreased to 0.12%, at 120 days of fermentation.