In order to obtain extremely rapid solidification structure far from equilibrium, the surface of AZ31B magnesium alloy was melted by CO2 laser, while the samples were extremely rapidly cooled in liquid nitrogen. Microstructure, performance and strengthening mechanism of laser melted layer were investigated. The results showed that grains of melted layer were highly refined and grain size was nearly uniform. The melted layer contained α-Mg and β-Mg17Al12, but β-Mg17Al12 which distributed along grain boundary was few. Because of strengthening mechanisms of fined grains, super solid solution and dislocation, microhardness of melted layer was up to 140HV. Wear loss of melted sample cooled in liquid nitrogen was about 50% less than that of the untreated sample and melted sample cooled in air, and wear resistance of melted layer was improved obviously. Impacting fracture morphology indicated that there was trace of plastic deformation, thus, plasticity and ductility were also improved.