To reveal the formation and evolution behavior of inclusions during magnesium treatment and resulfurization in Al-killed free-cutting steel, both laboratory experiments and thermodynamic calculations were carried out. The extracted samples were polished and analyzed by scanning electron microscopy and energy-dispersive spectroscopy. The results indicated that MgO formed immediately and then transferred to MgO·Al2O3 with the homogenization of [Mg] in steel in the case of low magnesium addition (w[Mg] < 0.0020％). However, MgO would keep stable in the case of high magnesium addition (w[Mg] ≥ 0.0020％). In the process of resulfurization, the addition of sulfur forced the transformation of MgO to MgO·Al2O3 accompanied with the formation of MgS if the mass fraction of [S] in steel was in the range 0.15％–0.70％. MgS precipi-tated as a solid solution containing a quantity of MnS, and the composition of the sulfide solution was calculated to be (Mg0.85Mn0.15)S when the mass fraction of [Mn] was 1.2％. The formation mechanisms of inclusions after magnesium and sulfur additions were discussed comprehensively, and proper models for the evolution of inclusions were set up.