The τ-MnAl phase and τ-MnAl–C phase are proven to be the efficient nucleants of the α-Mg during melt superheating and carbon inoculation of Mg–Al based alloys, respectively. The present work reports a new experimentally determined orientation relationship, [1[Formula: see text]0]τ-MnAl–C ‖ [0002]α-Mg and (110)τ-MnAl–C at a 2° angle to ([Formula: see text]010)α-Mg, between the τ-MnAl–C substrate phase and the α-Mg matrix phase. The corresponding interplanar spacing mismatch (fd) and interatomic spacing misfit (fr) are 0.45% and 5.83%, respectively. These low mismatch/misfit values indicate that the τ-MnAl–C phase has the potency to act as an effective nucleant for the α-Mg. The density functional theory calculations further demonstrate that the τ-MnAl phase has higher nucleation efficacy compared to the τ-MnAl–C phase with a similar crystal structure. Our newly developed MnAl–C master alloy containing the τ-MnAl–C phase can effectively reduce the grain size of the Mg–9Al alloy from 198 ± 8 µm to 130 ± 5 µm with fading resistance.