To modulate the matrix of purging plugs, MgO micropowder was introduced as a replacement to magnesia powder in alumina–magnesia castables, and the effect of MgO micropowder on the properties of alumina–magnesia castables and the possibility of developing chrome‐free castables were investigated. Experimental results showed that the introduction of MgO micropowder resulted in an improvement in the volume stability, strength, and thermal shock resistance of alumina–magnesia castables due to its high surface energy and small particle size. However, excessive amounts of MgO micropowder led to a lower densification, and there was a slight degradation in the performance of the alumina–magnesia castables. The slag resistance of the prepared alumina–magnesia castables was significantly better than that of the alumina–chrome castables. Microstructure and energy spectrum analysis showed that the formation of a solidified reaction layer, mainly consisting of spinel and CaAl12O19, was the major cause of the observed difference in slag resistance. In addition, the alumina–magnesia castables had a lower linear thermal expansion coefficient than that of the alumina–chrome castables at each experimental temperature, which effectively decreased the thermal stress during its service period, thus exhibiting good thermal shock resistance.