The binary magnesium-aluminum system has been studied extensively the last decades. Surprisingly, the kinetics of nucleation of the γ-precipitates (Mg₁₇Al₁₂) in the α-matrix have not been determined experimentally in detail. The main goal of this research is to investigate the precipitation kinetics of the γ-phase in a Mg-Al alloy during annealing, and to understand the relation between the precipitate volume fraction and the mechanical properties of the material. Comprehensive microstructural analysis was undertaken to reveal the number density, volume fraction, and morphological changes of the γ-precipitates after solution heat treatment (homogenization) and during subsequent annealing below the solvus temperature. As a result, the incubation time and steady state nucleation rate of γ-precipitates in the α-matrix were determined by fitting the experimental data to the classical nucleation theory.