For high corrosion resistance and extensively modified biodegradable Mg-based alloys and composites for bone implants, a new Mg-based matrix model prepared by powder metallurgy is discussed and developed. In this research, Mg-5 wt.%Zn alloys were selected as a case. And they were impacted by hot extrusion and aging treatments to construct microstructure with different characteristics. Their self-forming corrosion product layer in Ringer's solution, biodegradable behavior and corrosion mechanism were minutely investigated by in vitro degradation, electrochemical corrosion and cytocompatibility. The results demonstrated the extruded Mg-5 wt.%Zn alloy aged for 96 h showed high corrosion resistance, good biocompatibility for L929 and excellent ability of maintaining sample integrity during the immersion. Significantly, the alloy showed fine-grain microstructure and uniform distributed hundred nano-sized second phases, which promoted the formation of the uniform and smooth corrosion product layer at the beginning of immersion. The corrosion product layer was more stable in chloride containing aqueous solution and could be directly formed and repaired quickly, which effectively protected the matrix from further corrosion. In addition, an ideal model of Mg-based matrix for bone tissue engineering was tried to presume and propose by discussing the causal relationship between microstructure and bio-corrosion process.