The combination of Mg2+‐insertion type anodes with various Mg‐free cathode counterparts and electrolytes enables Mg‐ion batteries. Microsized magnesium stannide (Mg2Sn) active material for a potential Mg2+‐insertion anode has shown extremely low capacity and low Coulombic efficiency in the early cycles, due to not yet a full participation of active material and an irreversible capacity loss by anode–electrolyte interfacial reactions. An activation process, i.e., formation cycle, is necessary to mitigate those issues and to improve the cycling performance. Herein, the application of formation process to the Mg2Sn composite anode that includes graphite as an electrochemically inactive but electronically conductive component, the condition optimization of formation process, and the systematic studies of the effects of formation process on the cycling performance and anode–electrolyte interfacial reactions are reported. A basic understanding of the early cycling behavior and interfacial phenomena of Mg2Sn anode is provided, which gives insight into improvement of performance of alloy anodes in Mg‐ion batteries.