Abstract Magnesium alloys have been used as biodegradable implants in load bearing applications due to their biodegradability and excellent mechanical properties. However, the rapid corrosion rate still needs to be improved by surface modification, and so does the biocompatibility according to clinical demands for bone implants. This study demonstrated the effectiveness of applying a bio-composite coating on magnesium alloy by adding HA particles in electrolyte during MAO process (MAO–HA). The results suggested that HA particles took part in MAO process, getting decomposed into Ca3(PO4)2 under a high temperature caused by the intense micro-arc discharge generated at high applied voltage. In the meantime, synthesis of Mg3(PO4)2 was promoted under the high temperature. The sintering-caused phases Ca3(PO4)2 and Mg3(PO4)2 combined with HA composed the bioactive coating. Testified by scratch test, electrochemical test and short-term immersion test, the composite coating showed high bonding strength and improved corrosion resistance owning to the sintering-caused products sealed partial pores of the MAO coating. Therefore, this study indicated that the bio-composite coating obtained by MAO–HA process may be suitable for synthesizing promising bone implant materials in clinical application.