In the scope of supporting the development of Mg–Al alloys and related materials, an experimental study coupled with a CALPHAD thermodynamic modeling of the Al–C–Mg system was conducted. The peritectic decomposition of Al2MgC2 to form Al4C3, graphite and a liquid phase was measured at 1559 ± 10 K by DTA. In order to model the Mg solubility in Al4C3, DFT calculations were performed on the end-member phases Mg4C3, Al2Mg2C3 and Mg2Al2C3 and it was shown that Mg substitutes on the Al2 crystallographic site of the carbide structure. Based on recent literature data and a revised Al–C binary, a model description of the Al–C–Mg ternary is proposed for the first time. More specifically, it is used to calculate the liquidus projection and the phase formation sequence during Scheil solidification of a 91Mg–9Al wt% alloy inoculated with carbon. This work provides a convincing argument that Al2MgC2 is the nucleant responsible for the grain refinement of Mg–Al alloys inoculated by C.