High power disk laser was used to autogenously weld thin plates of AZ31B magnesium alloy. The influences of laser power, welding speed and power density on keyhole stability, defect formation and weld metal properties were evaluated through high speed video camera observation during welding and metallographic and mechanical examinations of welded specimens. Results showed that keyhole instability was the main cause of welding defects. The fluctuations in the keyhole inlet size and the related variation of the vapor pressure inside the keyhole resulted in the formation of spatters and underfilled beads. With a tightly focused laser beam, humping was the main defect at high welding speeds. Humping formation was promoted by disturbed melt flow because of an unstable elongated keyhole. A suitable combination of process parameters should be optimized to stabilize the keyhole and prevent defects related to its instability. Sound welded joints with similar mechanical properties as those of the base material could be produced.