Al8Mn5 particles form as primary solidification phases in Mg-Al-based alloys and are important for ensuring adequate corrosion resistance. However, excessive Al8Mn5 formation above the α-Mg liquidus temperature can lead to sludge formation, and the clustering of Al8Mn5 particles on oxide films can generate deleterious casting defects. Here, we use analytical SEM and real-time synchrotron x-ray radiography to study Al8Mn5 particle settling, the formation of a sludge layer, and the mechanism of Al8Mn5 clustering on oxides in AZ91 containing two Fe levels. It is shown that settling Al8Mn5 can become trapped in entrained oxide and that new Al8Mn5 particles also seem to nucleate on oxide films. On cooling, these Al8Mn5 particles continue to grow, creating large Al8Mn5 clusters.