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Treatment of bone defects resulting after tumor surgeries, accidents, or non-unions is an actual problem linked to morbidity and the necessity of a second surgery and often requires a critical healthcare cost. Although the surgical technique has changed in a modern way, the treatment outcome is still influenced by patient age, localization of the bone defect, associated comorbidities, the surgeon approach, and systemic disorders. Three-dimensional magnesium-based scaffolds are considered an important step because they can have precise bone defect geometry, high porosity grade, anatomical pore shape, and mechanical properties close to the human bone. In addition, magnesium has been proven in in vitro and in vivo studies to influence bone regeneration and new blood vessel formation positively. In this review paper, we describe the magnesium alloy's effect on bone regenerative processes, starting with a short description of magnesium's role in the bone healing process, host immune response modulation, and finishing with the primary biological mechanism of magnesium ions in angiogenesis and osteogenesis by presenting a detailed analysis based on a literature review. A strategy that must be followed when a patient-adapted scaffold dedicated to bone tissue engineering is proposed and the main fabrication technologies are combined, in some cases with artificial intelligence for Mg alloy scaffolds, are presented with examples. We emphasized the microstructure, mechanical properties, corrosion behavior, and biocompatibility of each study and made a basis for the researchers who want to start to apply the regenerative potential of magnesium-based scaffolds in clinical practice. Challenges, future directions, and special potential clinical applications such as osteosarcoma and persistent infection treatment are present at the end of our review paper. [ABSTRACT FROM AUTHOR]