The effect of Mg on MnS inclusion and the formation mechanism of (Mn,Mg)S‐MgAl2O4 (MA) composite inclusion are analyzed by combining observation for the inclusions in medium microalloyed steel with (and without) 15 ppm Mg, thermodynamics, phase diagram, and crystallography. The addition of magnesium can improve the morphology of inclusions and promote microstructure uniformity. MA is formed by the reaction of dissolved Mg, Al, and O in the Mn‐Mg‐Al‐S‐O liquid melt, while residual Mg is dissolved in MnS, forming (Mn,Mg)S. As the Mg content in the Mn‐Mg‐Al‐S‐O liquid melt increases, the precipitation temperature of the melt increases. Excessive Mg content can lead to a decrease in the proportion of MA in the melt, forming MgO instead of MA. Based on the two‐dimensional slices of MnS and MA, the three‐dimensional morphology can be derived. The lowest mismatch value is 8.00% when the interface is {111} of MnS and {110} of MA.