It was recently demonstrated that the vaporizing foil actuator welding (VFAW) method can directly join immiscible magnesium and steel alloys without coating or a third chemical element based intermetallic compound layer. The VFAW Mg/steel joint exhibits a mixed interface layer of up to 200μm thickness consisting of Mg matrix and Fe particles. Computer simulations have suggested the formation of the interlayer is from the high-velocity frictional shearing between the Mg/steel substrates during the oblique impact in the VFAW process. This paper investigates the formation of Mg-Fe interlayer under VFAW condition with different shearing velocities using molecular dynamics (MD) model, and studies the bonding strength under different scenarios. The results elucidate the critical role of shearing velocity and surface roughness in achieving Mg/Fe joint.