In this work an environmentally friendly water-activated battery was developed and investigated. The anode material was a magnesium alloy; the cathode consisted of manganese dioxide, potassium chloride and graphite. Battery characteristics were tested at room temperature and additionally in an atmospheric simulation chamber because water-activated batteries are mostly used in meteorological radiosondes. Voltage losses inside the battery were measured using a miniaturized reference electrode, and heat evolution of the battery was studied calorimetrically. The main source of voltage losses and heat was found to be the magnesium anode. Compared to the traditional Mg/CuCl batteries, there was little difference in voltage and capacity, but a significant difference in the environmental impact, as the Mg/MnO2 battery does not contain any heavy metal salts.