Modification of the microstructure of ZE41A-T5 magnesium alloy substrates was investigated by laser surface re-melting and solidification using a 2.5 kW Nd:YAG laser. The effects of laser power, high scan rate and beam configuration were examined. The microstructure of laser treated ZE41 consisted of small precipitates dispersed in a fine dendritic alpha-magnesium matrix at high scan rates. The redistribution of chemical elements depended mainly on the dwell time in the liquid stage. At high scan rates, long dwell times were achieved by splitting the laser beam into two spots trailing in the scan direction which resulted in a more homogenous distribution of Mg, Zn and Zr. Cracking due to thermal shrinkage during solidification was prevented by reducing the temperature of the melt pool. This was achieved by lowering the laser power, increasing the scan rate and laser spot size. Increasing the laser spot size in the scan direction was conducive to producing homogeneous microstructures without cracks.