Abstract The present work gives the data of systematic studies of the influence of magnesium on the crystal structure and hydrogenation behaviour of the PuNi3-type La1−xMgxNi3 (x = 0–0.67) intermetallic alloys. Synchrotron X-ray diffraction studies revealed that substitution of La in LaNi3 by Mg proceeds in an ordered way, only within the Laves type layers of the hybrid crystal structures build from the MgZn2- and CaCu5-type slabs. When completed, it leads to the formation of LaMg2Ni9 (2MgNi2 + LaNi5). Gradual increase of Mg content is accompanied by a linear decrease of the volumes of the unit cells. Interestingly, a substantial contraction takes place also for the Mg-free CaCu5-type slabs. Hydrogen interaction with the La1−xMgxNi3 alloys was investigated by in situ synchrotron X-ray, neutron powder diffraction and pressure–composition–temperature studies. In the whole substitution range, La1−xMgxNi3 alloys form intermetallic hydrides with H/M ratio ranging from 0.77 to 1.16. Magnesium influences structural features of the hydrogenation process and determines various aspects of the hydrogen interaction with the La1−xMgxNi3 intermetallics causing: (a) more than 1000 times increase in equilibrium pressures of hydrogen absorption and desorption for the Mg-rich LaMg2Ni9 as compared to the Mg-poor La2.3Mg0.7Ni9 and a substantial modification of the thermodynamics of the formation–decomposition of the hydrides; (b) an increase of the reversible hydrogen storage capacities following increase of Mg content in the La1−xMgxNi3 to ∼1.5 wt.% H for La2MgNi9; (c) improvement of the resistance against hydrogen-induced amorphisation and disproportionation; (d) change of the mechanism of the hydrogenation from the anisotropic to isotropic one. Thus, optimisation of the magnesium content provides different possibilities in improving properties of the studies alloys as hydrogen storage and battery electrode materials.