Abstract: Rechargeable aqueous magnesium-ion batteries (MIBs) show great promise for low-cost, high-safety, and high-performance energy storage applications. Although manganese dioxide (MnO₂) is considered as a potential electrode material for aqueous MIBs, the low electrical conductivity and unsatisfactory cycling performance greatly hinder the practical application of MnO₂ electrode. To overcome these problems, herein, a novel Mg-intercalation engineering approach for MnO₂ electrode to be used in aqueous MIBs is presented, wherein the structural regulation and electrochemical performance of the Mg-intercalation MnO₂ (denoted as MMO) electrode were thoroughly investigated by density functional theory (DFT) calculations and in-situ Raman investigation. The results demonstrate that the Mg intercalation is essential to adjusting the charge/ion state and electronic band gap of MMO electrode, as well as the highly reversible phase transition of the MMO electrode during the charging–discharging process. Because of these remarkable characteristics, the MMO electrode can be capable of delivering a significant specific capacity of ~419.8 mAh·g⁻¹, while exhibiting a good cycling capability over 1000 cycles in 1 M aqueous MgCl₂ electrolyte. On the basis of such MMO electrode, we have successfully developed a soft-packaging aqueous MIB with excellent electrochemical properties, revealing its huge application potential as the efficient energy storage devices.