Abstract An effective and reliable Finnis–Sinclair (FS) type potential is developed for large-scale molecular dynamics (MD) simulations of plasticity and phase transition of magnesium (Mg) single crystals under high-pressure shock loading. The shock-wave profiles exhibit a split elastic–inelastic wave in the [0001]_HCP shock orientation and a three-wave structure in the [10-10]_HCP and [-12-10]_HCP directions, namely, an elastic precursor, a followed plastic front, and a phase-transition front. The shock Hugoniot of the particle velocity (U _p) vs the shock velocity (U _s) of Mg single crystals in three shock directions under low shock strength reveals apparent anisotropy, which vanishes with increasing shock strength. For the [0001]_HCP shock direction, the amorphization caused by strong atomic strain plays an important role in the phase transition and allows for the phase transition from an isotropic stressed state to the product phase. The reorientation in the shock directions [10-10]_HCP and [-12-10]_HCP, as the primary plasticity deformation, leads to the compressed hexagonal close-packed (HCP) phase and reduces the phase-transition threshold pressure. The phase-transition pathway in the shock direction [0001]_HCP includes a preferential contraction strain along the [0001]_HCP direction, a tension along [-12-10]_HCP direction, an effective contraction and shear along the [10-10]_HCP direction. For the [10-10]_HCP and [-12-10]_HCP shock directions, the phase-transition pathway consists of two steps: a reorientation and the subsequent transition from the reorientation hexagonal close-packed phase (RHCP) to the body-centered cubic (BCC). The orientation relationships between HCP and BCC are (0001)_HCP ⟨-12-10⟩_HCP // {110}_BCC ⟨001⟩_BCC. Due to different slipping directions during the phase transition, three variants of the product phase are observed in the shocked samples, accompanied by three kinds of typical coherent twin-grain boundaries between the variants. The results indicate that the highly concentrated shear stress leads to the crystal lattice instability in the elastic precursor, and the plasticity or the phase transition relaxed the shear stress.