Abstract: Hydrogen-induced degradation in magnesium alloys is characterized by its abruptness, insidiousness, and catastrophic consequences, posing a critical bottleneck to their safe service in aerospace, new energy vehicles, and high-end equipment. This review systematically addresses the fundamental behavior of hydrogen in magnesium alloys, damage mechanisms, influencing factors, and mitigation strategies. First, the sources of hydrogen, diffusion anisotropy, and trapping mechanisms are introduced. Hydrogen exhibits pronounced diffusion anisotropy in magnesium alloys, and its diffusion behavior, together with trapping at grain boundaries, dislocations, and second-phase interfaces, determines the spatial distribution of local hydrogen concentration. Particular emphasis is then placed on the competitive and synergistic interactions among three major damage mechanisms: hydrogen-enhanced localized plasticity (HELP), hydrogen-enhanced decohesion (HEDE), and delayed hydride cracking (DHC). As the local hydrogen concentration increases, the dominant mechanism is proposed to evolve along the sequence HELP → HELP + HEDE → HEDE → HEDE + DHC → DHC, with twin boundaries acting as bridges that facilitate the transition and interaction among these mechanisms. Furthermore, the synergistic effects of alloy composition, microstructure, and external environment on the susceptibility to hydrogen-induced failure are summarized, and the mechanisms of crack initiation and propagation arising from the coupling of hydrogen diffusion, MgH₂ phase transformation, and stress fields are elucidated. Finally, mitigation strategies, including alloying, surface protection, and process optimization, are reviewed. In view of current limitations in in situ experimental validation, multiphysics coupled modeling, and the establishment of criteria for mechanism transitions, future research should prioritize the integration of high-resolution in situ characterization with multiscale simulations, incorporate data-driven approaches, and establish long-term evaluation systems for complex service environments. Such efforts are expected to advance the understanding of hydrogen-induced failure in magnesium alloys from phenomenological description toward quantitative prediction and safety assessment.