Aqueous magnesium-ion batteries (AMIBs) have been regarded as one of the most promising battery systems among the post-lithium-ion batteries due to their inherent safety, low cost and environmental friendliness. Unfortunately, the sluggish cathode kinetics arising from the inherent high charge density and large ionic radius of Mg²⁺, alongside the structural constraints of cathode materials, remains a fundamental challenge hindering the broad deployment of AMIBs. Recent advances in cathode materials and their interfacial compatibility with electrolytes have yielded valuable insights for optimizing AMIBs systems. In this review, the energy storage mechanisms of AMIBs are systematically elucidated and discussed in detail. Besides, several optimization strategies for cathode materials are critically examined and thoroughly discussed, including but not limited to structural engineering, surface modification and electrolyte compatibility enhancement. Finally, we briefly address the outstanding challenges and potential future developments in this field. This review is poised to offer novel approaches and a significant impetus for material optimization, thereby enhancing the electrochemical performance of AMIBs and other emerging battery systems.