The decomposition and oxidation behavior of magnesium diboride (MgB2) have been studied using thermogravimetry (TG), XRD and SEM-EDS. The reactions were carried out by heating MgB2 powder in a stream of argon or air at atmospheric pressure. In the temperature range explored (298–1673 K), four successive steps were observed in the decomposition process of MgB2. The rate-limiting steps of the decomposition process were found to be associated with the nucleation or formation of boron-rich phases. The oxidation process of MgB2 comprised five successive phases in the temperature range explored (298–1673 K). There was close relationship between the decomposition and oxidation behavior of MgB2. Experimental results showed that the decomposition reactions occurred during the oxidation process. The acceleration shown in the weight gain curve can be ascribed to the rapid oxidation of Mg vapor released from the decomposition reactions. The microstructure and composition of the oxide scale formed in the oxidation process were investigated using XRD and SEM-EDS. The oxide layer structure was identified based on the experimental results in this study.