From previous studies, it is known that the dissolution of β-Mg17Al12 at high temperature and the increase of densities at high pressure after hot isostatic pressing (HIP) are the two main reasons for significant improvement in the ductility of AZ61 magnesium alloy prepared by SLM. However, the mechanism of dissolution of β-Mg17Al12 in SLMed AZ61 magnesium alloy at high temperature is not clear. To illustrate the mechanism of the effect of β-Mg17Al12 dissolution on the ductility of SLMed AZ61 Mg alloy, the effect of solid solution heat treatment (T4) on the microstructure and mechanical properties of SLMed AZ61 was investigated and the kinetic model of β-Mg17Al12 dissolution of SLMed AZ61 magnesium alloy was established. According to the results, there is no significant change in the dissolution of the β-Mg17Al12 with an increase of temperature and time when the T4 temperature is lower than 410 °C. At the optimum solution heat treatment temperature of 410 °C, the dissolution rate is accelerated and the β-Mg17Al12 is completely dissolved after 2 h. In addition, the dissolution rate of β-Mg17Al12 decreases with the increase of dissolution time. The strength of SLMed AZ61 magnesium alloy decreases and the ductility increases as the T4 temperature increases. The strength of the specimens is reduced by grain coarsening (29.2 ± 3.7 μm), but the elongation is increased by 90% compared to SLMed AZ61, due to the effect of β-Mg17Al12 dissolution.