High-performance lightweight materials give rise to a demand for magnesium-based composites. Magnesium metal matrix composites have found extensive applications in the aerospace and automotive industries due to their remarkable mechanical properties. Limitations in dispersion, strength, and interface strength of magnesium-based composites are seen through the addition of some hybrid reinforcements and different fabrication techniques. In this regard, previous studies have demonstrated the ability of various reinforcements such as graphene, carbon nano tubes, silicon carbide, and titanium carbide to a magnesium matrix for the enhancement of its metallurgical properties. There are still several challenges in the development of magnesium metal matrix composites, such as non-homogeneous distribution, poor creep resistance at elevated temperatures, limited cold work ability, and low corrosion resistance. The challenges that need to be overcome and suggestion for improving the wear resistance and frictional properties of magnesium metal matrix composites were studied and discussed. This review evaluates the importance of different reinforcement percentages as well as the development of magnesium metal matrix composites. The different types of fabrication techniques that are well suited to overcome the challenges of poor dispersing, non-homogeneous distribution, interfacial problems, and poor wettability are discussed. Microstructure analysis, the agglomerating effect, and matrix bonding strength are also discussed. The challenges and future scope of research are discussed for the demonstration of the importance of more scientific studies in magnesium metal matrix composites.