Sn nanoparticles were prepared by the method of DC arc plasma and introduced into the AZ31 magnesium alloy melt by stir casting. Influence of the different addition proportion of Sn nanoparticles on as-cast microstructures and mechanical properties of AZ31 magnesium alloy were investigated by metallography, scanning electron microscopy (SEM) and tensile tests. The results show that, the eutectic phases which were precipitated in the shape of lamellar will be inhibited, but the amount of β-Mg17Al12 distributed at the grain boundary in the shape of bone will be promoted with the addition of Sn nanoparticles. Importantly, it is observed that Sn nanoparticles were generated to nano-sized Mg2Sn particles in the magnesium alloy matrix, but mainly existed in the form of particle clusters. With the excessive addition of Sn nanoparticles, a more severe Mg2Sn nanoparticle clusters and a reduction of the mechanical properties will be observed. In the present study, the most superior mechanical properties of the AZ31 magnesium alloy can be achieved when the proportion of Sn nanoparticles was about 1wt.%.