AZ31B magnesium alloy and 6061-T6 aluminum alloy were lap joined together with the addition of Fe interlayer by fusion welding of hybrid laser–tungsten inert gas (TIG) technique. The influence of location of laser focal spot (LFS) on joint penetration depth and that of the depth on joint strength were investigated. The results showed that when the LFS was just on the surface of Al plate, the deepest penetration could be obtained, which contributed to the improvement of shear strength of Fe-added joints, but not to the elevation of the strength of Mg/Al direct joints. The addition of Fe interlayer suppressed massive production of Mg–Al intermetallics but produced Fe–Al intermetallics in the fusion zone of the joints, whose micro-hardness was extremely high and was also adverse for the enhancement of joint shear strength. The effect of Fe-interlayer thickness on the joint shear strength was also examined, and the maximum shear strength of Fe-added joint could achieve 100MPa with 0.13mm thick Fe interlayer. The fracture modes of 0.07 and 0.13mm Fe-interlayer-added joints were both quasi-cleavage, while those of direct and 0.22mm interlayer-added joints were completely cleavage. The theoretical shear strength of the Fe-added joints was also discussed.