To investigate the petrogenesis of Fe-Ti oxide ore deposits, we report Mg and Fe isotopic compositions for coexisting olivine, clinopyroxene and ilmenite in Fe-Ti oxide ores, magnetite-bearing gabbros and gabbros from the Panzhihua Fe-Ti-oxide-bearing layered mafic intrusion, Southwest China. Olivine and clinopyroxene have δ26Mg values ranging from −0.47 to −0.32‰ and −0.40 to −0.18‰, and δ57Fe values from −0.21 to +0.23‰ and −0.16 to +0.20‰, respectively. Most of these mineral pairs display disequilibrium inter-mineral fractionation as they fall off the theoretically predicted equilibrium fractionation lines. Ilmenites from oxide ores and magnetite-bearing gabbros (Group 1) have mantle-like or lower δ26Mg values of −0.80 to −0.13‰ and δ57Fe values of −0.33 to −0.23‰, and those from gabbros (Group 2) display slightly to extremely higher δ26Mg values of +0.48 to +23.10‰ and much lower δ57Fe values of −0.59 to −0.33‰. The δ26Mg negatively correlates with δ57Fe in all ilmenites, which cannot be explained by simple extensive fractional crystallization or Soret diffusion. Instead, the negative correlations between δ26Mg and δ57Fe and between MgO and FeO in ilmenites result from Mg-Fe inter-diffusion among ilmenite, silicate minerals and high-Ti basaltic melts. The extremely large isotopic variations were produced by the large Mg activity gradient between different types of ilmenites and melts, which was enhanced by interstitial liquid immiscibility process. Our study therefore demonstrates that combined Mg-Fe isotopes can be used to trace the genesis of Fe-Ti-oxide-bearing ore.