Grain refinement is an effective approach to improve the magnesium alloy mechanical properties. In order to further reveal the refinement mechanism of AlN particles on Mg-Al alloy in theory, DFT-based first-principles calculations were employed to investigate the heterogeneous nucleation of & alpha;-Mg on AlN substrate and & alpha;-Mg with the low index surfaces of (0001), (1010), (1011), (1012), (1120), (1121), (1122) under the adsorption coverage conditions of 0.5 and 1 ML. The calculation results of the surface energy show that the Al-terminated, N (N1, N2)-terminated surfaces have lower surface energies, which will be profit to prompt Mg atoms to nucleate on these surfaces. And that the adsorption effects of Mg atoms on the potential terminated surfaces of AlN particles are stronger than that of & alpha;-Mg matrix, which confirms that the Mg atoms tend to be adsorbed by AlN surfaces rather than & alpha;-Mg matrix. The calculation results of the charge density and the charge density difference further reveals that the strong interaction can be also induced between the Mg adatoms and AlN surfaces, which indicate that a strong cohesion is formed between them. Thus, it can be determined that AlN particles are excellent reinforcements of Mg-Al alloys, which are benefit to improve the mechanical properties of AlN/Mg-Al composites.