We have studied the metal-insulator transition (MIT) in Mn-substituted Sr3Ru2O-- by x-ray photoemission (XPS) and angle-resolved photoemission spectroscopy (ARPES). In XPS, both the surface- and bulk-sensitive spectra show a two-peak structure, corresponding to the well screened and the unscreened excitations. The evolution of the well screened peak with Mn is that the higher the concentration of Mn impurities, the lower the intensity of the peak, indicating that the screening channels are determined by the metallic property of a system. In ARPES, a strong doping dependence is also observed for the Fermi surface, which loses the 2D sheet associated with the dxy band and reduces to the 1D dxz/yz Fermi surfaces, as the system changes from metal to a Mott insulator. As for the band dispersion, we see that the dxy band shifts in energy toward the chemical potential, becoming degenerate with the dxz/yz bands, to the point of being indistinguishable. A nesting vector (0.33, 0.33, 0) has been determined from the Fermi surface of the 10% Mn doped sample, as in response to-or alternatively inducing-a charge/orbital ordering across the Mott transition. The opening of an energy gap is observed below the MIT both as a function of temperature and Mn substitution. To obtain a microscopic understanding of the MIT, we have performed a local-density approximation calculations for the electronic structures of Sr3Ru2O-- and found that spin-orbital coupling induces an unexpected magnetic anisotropy. This might play a key role in the emergence of the MIT and magnetic superstructure in Mn-substituted Sr3Ru2O--, as well as the nematic behavior in the parent compound.