The ZK60 magnesium alloy plates were welded by laser beam welding (LBW) and the microstructures in the partially melted zone (PMZ) of welded joints were investigated. For the as-cast alloy, the eutectoid mixtures along grain boundaries (GBs) in the PMZ are liquefied during welding, and their re-solidified materials present hypoeutectic characters, which lead to more severe segregation of the Zn element along GBs, and thus enhance the cracking tendency of the PMZ. The main reasons for liquation cracking of PMZ are described as that the absence of liquid at the terminal stage of solidification leads to the occurrence of shrinkage cavities in PMZ, from which liquation cracking initiates, and propagates along the weakened GBs under the tensile stress originating from solidification shrinkage and thermal contraction. Lower heat input can reduce the cracking tendency, and the plastic processing such as rolling also contributes to the mitigation of PMZ liquation cracking by reducing the size of eutectoid phases and changing their distribution in the base metal.