It is used by many libraries for preserving books, and as an insulator in industrial cables. It is also used as a medication to relieve heartburn, sore stomach, or acid indigestion. Medical uses of magnesium oxide also include using it as a short-term laxative, or used to supplement a diet with magnesium.

Magnesium oxide is used as a basic refractory material for lining crucibles. Magnesium oxide is a principal ingredient in construction materials used for fireproofing. It is used as a reference white colour in colorimetry. The emissivity value is about 0.9 Pressed MgO is used as an optical material. It is transparent from 300 nm to 7 µm. The refractive index is 1.72 at 1 µm. It is sometimes known by the Eastman Kodak trademarked name Irtran-5, although this designation is long since obsolete. Crystalline pure MgO is available commercially and has small use in infra-red optics.

Magnesium oxide is also used in animal feeding industry and there are special grades available. MgO is hygroscopic in nature and care must be taken to protect it from moisture. Magnesium hydroxide (Mg(OH)₂) which forms in the presence of water can be reversed by heating to separate moisture.

In medicine, magnesium oxide is used as a magnesium supplement, to improve symptoms of indigestion, or as a short-term laxative (to evacuate bowels prior to some surgeries). Side effects may include nausea and cramping.