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Magnesium hydride (MgH2) is a hydrogen-rich compound generating significant amounts of hydrogen in the process of hydrolysis, i.e., in the course of its chemical interaction with water or with aqueous solutions. This process is of great interest for the on-site hydrogen generation aimed at application of H2 as a fuel for PEM fuel cells. We propose a review of recent reference publications in the field and also present the results of our own research. The increase of the rates of H2 release and the completeness of transformation of MgH2 are two important goals, which can be attained by optimizing the size of the powders of MgH2 by ball milling, by using catalysts added to MgH2 and to aqueous solutions, and by increasing the interaction temperature. The effect of these parameters on the degree of conversion and the rates of hydrogen evolution are analyzed in detail and the best systems to reach the efficient hydrolysis performance are identified. The mechanism of catalytic hydrolysis is proposed, while further improvements of the process of hydrolysis are required and additional studies of this important topic are needed.