In order to study the effect of laser shock processing (LSP) on the properties of magnesium alloy, an AM50 magnesium alloy sample was processed with Nd∶glass laser with the wavelength of 1054 nm and pulse width of 23 ns, and its surface figure, microstructure, micro-hardness and residual stress were examined and analyzed. The experimental results show that a bright dense shallow dent forms in the laser shocked area with laser power density of 3.1 GW/cm2, and the dent depth is about 27 μm. Ultrahigh strain rate plastic deformation takes place in the surface layer and results in extensive formation of dislocations and twins, and the depth of strengthening layer is about 0.8 mm. Laser shock processing improves hardness and residual stress of AM50 magnesium alloy significantly, surface micro-hardness increases by up to 58% and the compressive residual stress on the surface of laser shocked area reaches up to -146 MPa. The experiment results show that the effect of laser shock evidently strengthens the magnesium alloy.