Mg₂(Si,Sn) shows great promise as thermoelectric material as it is made from non‐toxic, abundant, and cost‐effective elements offering high performance. This has been emphasized by several thermoelectric generator prototypes, demonstrating technological maturity. However, material stability is paramount for large‐scale applications whereas we reveal here that the thermal stability of n‐type Mg₂(Si,Sn) may be limited even at room temperature (RT). Integral thermoelectric properties measurements, locally resolved Seebeck coefficient analysis, scanning electron microscopy/energy‐dispersive X‐ray spectroscopy, and atomic force microscopy are employed to assess changes of n‐type samples stored in ambient atmosphere for years, revealing the evolution of the carrier concentration and transport properties in the material as well as surface degradation. This is caused by the diffusion of loosely bound Mg from the bulk towards the surface and subsequent oxidation, leading to a change of Mg‐based intrinsic defect concentrations, thereby degrading the thermoelectric performance. This microscopic mechanism is backed up by first‐principles calculations, revealing that Mg diffusivity in Mg₂(Si,Sn) is high at RT and that diffusion occurs mainly via Mg vacancies. The observed much faster degradation of Sn‐rich Mg₂(Si,Sn) can be correlated with the higher density of Mg vacancies in Mg₂Sn compared to Mg₂Si, as predicted from defect formation energies.