Magnesium alloys hold tremendous potential for applications in automotive lightweighting, with reliable joining being one of the key technical issues for lightweight manufacturing. Laser welding is a suitable joining technology for the development of magnesium alloys due to its low heat input. However, the insufficient in-service performance for laser-welded joints of magnesium alloys, currently restricts their engineering applications. This paper summarizes the cutting-edge research progress in laser welding of magnesium alloys, with a focus concentrated on the intrinsic characteristics of laser welding of magnesium alloys and the influence of welding process parameters on the quality of welded joints. Meanwhile, taking into consideration the critical issues found in the cases of magnesium alloys for automotive utilization, the core influencing factors, regarding the service performance of laser-welded joints of magnesium alloys for automotive applications, are reviewed, and the prospect for future development is proposed.