Provided are a magnesium-based alloy and a manufacturing method thereof. In the method, a magnesium alloy is melted into liquid phase, and an alkaline earth metal oxide is added into a molten magnesium alloy. The alkaline earth metal oxide is exhausted through surface reduction reaction between the melt and the alkaline earth metal oxide. Alkaline earth metal produced by the exhaustion reacts with Mg and/or other alloying elements in the magnesium alloy so that an intermetallic compound is formed. The magnesium prepared by the method is excellent in fluidity and hot-tearing resistance. To this end, the alkaline earth metal oxide added is CaO, and the added amount of CaO is 1.4 to 1.7 times the target weight of Ca to be contained in the final Mg alloy.