Cold metal transfer (CMT)-Wire arc additive manufacturing (WAAM) has been widely utilized in the production of large Magnesium (Mg) alloy components. However, the thermal cycling and heat input inherent in the CMT-WAAM process can adversely affect the microstructure and properties of Mg-Rare earth (RE) alloys. Currently, there is a lack of effective, low-cost, and easy-to-implement methods to mitigate these issues. In this study, an active cooling technique (ACT) comprising base cooling and bypass cooling was proposed. The ACT facilitates in-situ cooling of CMT-WAAMed WE43 components through uninterrupted water flow in the substrate and bypass plate, offering advantages in cost-effectiveness, safety, and ease of implementation. It was found that the CMT-WAAMed WE43 alloy thin wall component manufactured with the ACT assistance had fewer hard-brittle eutectic phases and finer grains due to the accelerated cooling rate. ACT effectively reduced the heat accumulation and peak temperatures in the component. Furthermore, it inhibited the transformation of the β1 phase to the β phase and suppressed the coarsening of the β1 phase. ACT also improved the ultimate tensile strength (UTS), yield strength (YS), and elongation (EL) of the CMT-WAAMed WE43 component by 11.7 %, 5.8 %, and 72.3 %, respectively. This study provides a novel approach for the microstructure optimization of CMT-WAAMed Mg-RE alloy, which is crucial for the production of high-performance and large-size components in the aerospace industry.