This paper discusses about the recent advancements in laser cladding and alloying processes used for surface property enhancement of magnesium and its alloys. Laser cladding and alloying is advanced manufacturing method used for surface modification of metallic materials in the modern industries. The cladding process is surface modification technique, which is used for deposition of thick layer of advanced materials on surface of conventional materials to improve the surface properties like, wear resistance, hardness, oxidation resistance, corrosion resistance, biocompatibility and heat resistance. The advanced materials generally used for cladding operations are transition metals, alloys, ceramics, composites, nanomaterials, rare earth oxide and some solid lubricant additives. The conventional substrate materials are steel, cast iron, titanium alloy, aluminium alloy, magnesium alloys and copper alloys. Laser cladding is most widely used coating technique because of its attractive properties such as low dilution rate, good metallurgical bonding between coating and substrate, less distortion, narrow heat affected zone, high solidification and cooling rate. In this article magnesium alloy is considered as substrate material and the various coating materials used for its surface modification are explained. Also, the effects of various laser process parameters on phase composition, microstructure, elemental composition, mechanical properties, tribological properties and corrosion resistance are discussed. The characterization techniques such as XRD, SEM, EDS, Vickers microhardness test, wear and friction test, corrosion test used for coating analysis are described. Furthermore, the problem arises in laser cladding and alloying on magnesium alloy and their possible remedies are discussed.