Grain refinement by inoculation treatment is one of the simplest and most efficient ways to improve the mechanical properties of MgAl alloys. In this study, a novel GNP@MgO grain refiner was designed by an in-situ reaction of CO2 gas and Mg melt. It can significantly reduce the average grain sizes of Mg9Al alloys from 126.9 μm to 12.7 μm. The mechanical properties of Mg9Al alloys were significantly enhanced, and its ultimate compressive strength was increased from 370 MPa to 436 MPa. HRTEM characterization and atomic interface analyses have shown that the Al4C3 phase has an orientation relationship with α-Mg as (009)Al4C3//(002)Mg, and [11−20]Al4C3//[11–20]Mg, which has a low degree of lattice mismatch of 5.79%. Besides, these MgO nanoparticles can adsorb on the surface of α-Mg grains and play a role in hindering growth and solute diffusion. The ultra-high grain refinement efficiency of 90% is achieved through the synergistic effects of GNP promoting heterogeneous nucleation and MgO nanoparticles inhibiting grain growth. This work sheds new light on designing innovative and effective grain refiners for Mg alloys.