Abstract: A lead-free free-cutting magnesium brass alloy comprises 56.0 to 64.0 wt % Cu, 0.6 to 2.5 wt % Mg, 0.15 to 0.4 wt % P and other elements 0.002 to 0.9 wt % which comprise at least two elements selected from the group consisting of Al, Si, Sb, Sn, Re, Ti and B and the balance being Zn and unavoidable impurities. The process for producing such alloy is also proposed. The invented alloy is excellent in cuttability, castability, hot and cold workability, corrosion resistance, mechanical properties and weldability and particularly applicable in spare parts, forging and castings which need cutting, grinding and electroplating process. The cost of necessary metal materials of the invented alloy is lower than lead-free free-cutting bismuth and antimony brass alloy and is equivalent to lead-contained brass alloy.