Magnesium (Mg) deficiency is a major factor limiting the growth and development of plants. Mulberry (Morus alba L.) is an important fruit tree crop that requires Mg for optimal growth and yield, especially in acid soils. However, the molecular mechanism of Mg stress tolerance in mulberry plants remains unknown. In this study, we used next-generation sequencing technology and biochemical analysis to profile the transcriptome and physiological changes of mulberry leaves under different Mg treatments (deficiency: 0 mM, low: 1 mM, moderate low: 2 mM, sufficiency: 3 mM, toxicity: 6 mM, higher toxicity: 9 mM) as T1, T2, T3, CK, T4, T5 treatments, respectively, for 20 days. The results showed that Mg imbalance altered the antioxidant enzymatic activities, such as catalase (CAT), peroxidase (POD), and superoxide dismutase (SOD), and non-enzymatic, including soluble protein, soluble sugar, malondialdehyde (MDA), and proline (PRO), contents of the plant. The Mg imbalances disrupted the ultrastructures of the vital components of chloroplast and mitochondria relative to the control. The transcriptome data reveal that 11,030 genes were differentially expressed (DEGs). Genes related to the photosynthetic processes (CAB40, CAB7, CAB6A, CAB-151, CAP10A) and chlorophyll degradation (PAO, CHLASE1, SGR) were altered. Antioxidant genes such as PER42, PER21, and PER47 were downregulated, but DFR was upregulated. The carbohydrate metabolism pathway was significantly altered, while those involved in energy metabolism processes were perturbed under high Mg treatment compared with control. We also identified several candidate genes associated with magnesium homeostasis via RT-qPCR validation analysis, which provided valuable information for further functional characterization studies such as promoter activity assay or gene overexpression experiments using transient expression systems.