An aluminum alloy wire, an aluminum alloy stranded wire, a covered electric wire, and a wire harness that are of high toughness and high electrical conductivity, and a method of manufacturing an aluminum alloy wire. The aluminum alloy wire contains not less than 0.2% and not more than 1.0% by mass of Mg, not less than 0.1% and not more than 1.0% by mass of Si, not less than 0.1% and not more than 0.5% by mass of Cu, and a remainder including Al and an impurity, and satisfies 0.8 Mg/Si≦2.7 by mass ratio. The Al alloy wire is manufactured through the successive steps of casting, rolling, wiredrawing, and softening treatment.