In order to reduce the likelyhood of being "mana-screwed" (having too few lands in your starting hand) or being "mana-flooded" (too many lands in your starting hand) the following mulligan rule applies:
Each player draws a number of cards equal to their starting hand size, which is seven. A player who is dissatisfied with their initial hand may take a mulligan. First, the starting player declares whether they will take a mulligan. Then the other player does the same. Once both players have made a declaration, all players who decided to take mulligans do so at the same time. To take a mulligan, a player shuffles the cards in their hand back into their library, draws a new hand of cards equal to their starting hand size, then puts a number of those cards equal to the number of times that player has taken a mulligan on the bottom of their library in any order. Once a player chooses not to take a mulligan, the remaining cards become that player's opening hand, and that player may not take any further mulligans. This process is then repeated until no player takes a mulligan. A player can take mulligans until their opening hand would be zero cards. (Comprehensive Rules, 103.4, also known as the "London" mulligan).
This rule can no longer be applied in Highlander tournaments as of 07/12/2019, 0:00 CET.
The first time a player takes a mulligan, he or she draws a new hand of as many cards as he or she had before. Subsequent hands decrease by one card as normal (Comprehensive Rules, 103.4c, also known as the multiplayer mulligan).
This rule can no longer be applied in Highlander tournaments as of 10/15/2013, 0:00 CET.
For one of the starting hands during each game only, each player may "reject" any number of cards from his or her hand. They set these cards aside face down, draw the corresponding number of cards from their deck and, after that, reshuffle the set-aside cards back into their library. The opponent cuts the deck afterwards (mandatory). Note that you can choose the hand from which you reject cards, e.g. with a very bad initial hand of 7 you may decide to take a normal mulligan without rejecting any cards. You may then apply the new mulligan to your 6-card-hand.
This rule can no longer be applied in Highlander tournaments as of 10/15/2007, 0:00 CET.
For the first drawn hand during each game only, if the person has zero, one or seven Land cards in his opening hand, the person may reveal it to his opponent, who may inspect the cards. The cards are then shuffled back into his library and seven new cards are drawn. Please note that this does not give the opponent a right to also take a mulligan!
The player may take a normal "one card less" Mulligan (also known as the Paris-Mulligan rule) instead or in addition to the "old" mulligan.