This study investigates the influence of reactive MgO (r-MgO) replacement levels and water-to-binder (w/b) ratios on the compressive strength, carbonation front, and pore structure of mortars with r-MgO and Portland cement (r-MgO-PC) as binder. The experimental results reveal that an increase in the w/b ratio decreases the carbonation degree for mortars with 20% r-MgO, but increases the carbonation degree for mortars with 60% r-MgO. The r-MgO replacement level together with the w/b ratio and carbonation degree impacts the type and quantity of the carbonation products, namely Mg-calcite, nesquehonite and the hydrated amorphous Mg carbonate, which affects the pore structure and compressive strength of the matrix. The maximum strength for mortars with 20% r-MgO occurs at the lowest w/b ratio (0.45), while the maximum strength for mortars with 60% r-MgO occurs at the intermediate w/b ratio (0.65). A design of r-MgO replacement level, w/b ratio in conjunction with the drying and carbonation curing regimes is needed for further advancement and application r-MgO-PC system.