Magnetic ions ͑Mn͒ were substituted in MgB 2 single crystals resulting in a strong pair-breaking effect. The superconducting transition temperature, T c , in Mg 1−x Mn x B 2 has been found to be rapidly suppressed at an initial rate of 10 K / % Mn, leading to a complete suppression of superconductivity at about 2% Mn substitution. This reflects the strong coupling between the conduction electrons and the 3d local moments, predominantly of magnetic character, since the nonmagnetic ion substitutions, e.g., with Al or C, suppress T c much less effectively ͑e.g., 0.5 K / % Al͒. The magnitude of the magnetic moment ͑Ӎ1.7 B per Mn͒, derived from normal state susceptibility measurements, uniquely identifies the Mn ions to be divalent, and to be in the low-spin state ͑S =1/2͒. This has been found also in x-ray absorption spectroscopy measurements. Isovalent Mn 2+ substitution for Mg 2+ mainly affects superconductivity through spin-flip scattering reducing T c rapidly and lowering the upper critical field anisotropy H c2 ab / H c2 c at T = 0 from 6 to 3.3 ͑x = 0.88% Mn͒, while leaving the initial slope dH c2 /dT near T c unchanged for both field orientations.