To reveal the effect of Mg treatment on the microstructure evolution behavior in the actual steel welding process, the microstructure and properties of Al-deoxidized high-strength ship plate steel with Mg addition were analyzed after double-side submerged arc welding. It was found that the Al–Mg–O + MnS inclusion formed under 26 ppm Mg treatment could promote acicular ferrite (AF) nucleation in the coarse-grained heat-affected zone (CGHAZ) and inhibit the formation of widmanstätten ferrite and coarse grain boundary ferrite. In the fine-grained heat-affected zone (FGHAZ) and intercritical heat-affected zone (ICHAZ), polygonal ferrite and pearlite were dominant. Al–Mg–O+MnS cannot play a role in inducing AF, but the grain size of ferrite was refined by Mg addition. The impact toughness in HAZ of the Mg-added steel was higher than that of Mg-free steel. With the heat-input rising from 29.55 to 44.11 kJ/cm, it remained relatively stable in Mg-treated steel. From the fusion line to the base metal, the micro-hardness of the fusion zone, CGHAZ, ICHAZ and FGHAZ decreased to some extent after Mg addition, which means the cold cracking tendency in the welding weak zone could be reduced. Finally, the mechanisms of Mg-containing inclusion-induced AF were also systematically discussed.