The magnetic properties of beta-Mn and the effect of the substitution of non-magnetic Al were systematically investigated by measuring thermodynamic and transport properties, and the NMR and polarized neutron scattering for beta-Mn1-xAlx alloys with 0 less than or equal to x less than or equal to 0.4. beta-Mn is paramagnetic down to the lowest temperature (1.4 K) but with strong spin fluctuations. Substitution of Al atoms which preferentially occupy one of two crystallographic sites (site II) results in the formation of local moments on Mn atoms, and makes the ground state into a spin-glass-like state. NMR measurements revealed almost independent magnetic behaviour of the two different sites, and static magnetic ordering of Mn at site II for x greater than or equal to 0.05, although the possibility of very weak magnetism of the site-I atoms cannot be excluded. The temperature dependence of the spin-lattice relaxation rate 1/T-1 indicates antiferromagnetic correlations of paramagnetic spin fluctuations, and its saturation at higher temperatures for beta-Mn0.97Al0.03 and a critical slowing down of the fluctuations at low temperatures for beta-Mn0.9Al0.1. Polarized neutron scattering experiments showed directly strong spin fluctuations with antiferromagnetic correlations for both beta-Mn and beta-Mn0.9Al0.1. The characteristic energy of fluctuations for beta-Mn is fairly large even at 7 K (2 Gamma = 40 +/- 10 meV), implying a quantum origin of the fluctuations, while the energy spectrum of beta-Mn0.9Al0.1 becomes very sharp at low temperatures, within a resolution-limited energy width, indicating damping of spin fluctuations into a spin-glass-like state. These results can be interpreted in terms of the transition from a spin liquid to a spin glass caused by the substitution of Al that gives rise to the release of the antiferromagnetic frustration of the characteristic crystal lattice. Considerable similarity of the characteristic features to those of the highly frustrated Laves phase compounds Y(Sc)(Mn1-xAlx)(2) is argued. The possible frustration on site II in the beta-Mn structure, a three-dimensional network of corner-sharing regular triangles, which is similar to the two-dimensional Kagome lattice, is pointed out.