This study aimed to provide a critical review of the magnesium‐air fuel cell (MAFC) system to provide readers with an overall comprehension of MAFC, which focuses on the modification of the magnesium anode and properties of saltwater as an electrolyte. Although MAFC is benign to the environment, it is well‐known for its challenging corrosion issue and by‐product deposition that affect its durability for commercialization and long‐term application. Since that MAFC is able to use seawater as electrolyte, it has great potential to be used as an alternative energy option for the marine sector. This journal will dissect the ability of MAFC to be used as a competitive alternative energy. Over the years, researchers have adopted several approaches, such as experimenting with different types of magnesium alloy and anode fabrication techniques, to tackle corrosion problems to alter the microstructure and mechanical properties of the anode in addition to applying a coating protection and using Mg‐based composite material. Furthermore, studies intriguingly and gradually focused on electrolyte formulation with different types of additives to address the debilitating precipitation issue and improve the discharge performance. Given the problems that arise in the system, currently, MAFC commercial products are only suitable as emergency back‐up power. In future work, an improved storage system for MAFC should be built to accommodate the precipitation products while maintaining the desired cell performance.