In this study, a magnesium alloy/steel butt joint was taken as research material. A combined heat source model was implemented to simulate a laser-induced tungsten inert gas (TIG) hybrid welding heat source. The coupling effect between the laser and TIG and the formation of Fe-Ni solid solution zone were analyzed. ANSYS software was employed to simulate the welding temperature distribution and thermal cycle curve. Simulation and experimental results were in good agreement, verifying the accuracy and applicability of the proposed heat source model. The peak temperature of the joint reached 2249 ℃, and the Ni interlayer and adjacent steel base material were exposed to a high temperature, promoting interfacial metallurgical reaction and element diffusion and providing the temperature condition for the formation of Fe-Ni solid solution zone, AlNi phase, and an interface layer with a double solid solution structure. The residence time of the magnesium alloy molten pool was 0.28 s, which ensured that the liquid magnesium alloy could be fully wetted and spread on the steel and eventually achieved good joint formation. Under the agitation of the molten pool, the strength of the magnesium alloy weld was enhanced by dispersion distribution of strengthening phase AlNi.