To overcome the key scientific issues of poor plasticity of most magnesium alloys at room temperature, this paper reviews the theoretical and experimental basis of using stacking fault energy to improve their room temperature plasticity from three aspects: the dislocation characteristics of magnesium alloy, the influence of stacking fault energy on the deformation mechanism, and the relationship between stacking fault energy and critical shear stress of slip system. On this basis, the calculation model of “stacking fault energy-critical shear stress of magnesium alloy slip system” was established. And the critical shear stress of pure Mg, Mg-Al, Mg-Zn and Mg-Y alloy at base plane, prismatic plane and pyramidal plane was calculated by using this model. The influence of Al, Zn and Y on the plasticity of Mg alloy was analyzed by comparing the critical shear stress difference between the slip system of non-base plane and base plane of Mg alloy and pure Mg, so as to verify the reliability of the model. Finally, we propose to reduce the slip shear stress of non-base plane dislocations (especially the dislocations) as a guideline to select appropriate alloy elements for the design of high plasticity magnesium alloys at room temperature.