Although Al produces a solid metallurgical bonding with Mg alloy substrates, micropores or crevices in the Al coating can reduce the resistance of Mg alloy to corrosion. In this study, a composite coating with a defect-free microstructure was prepared on the AZ31 Mg alloy substrate by introducing Al 2 O 3 into the Al matrix via the method of laser cladding. On the one hand, Al 2 O 3 with thermal insulation had a low thermal expansion coefficient and was not very prone to voids during laser melting. On the other hand, Al 2 O 3 particles with a small size acted as the filler in the micropores or crevices. The Al/Al 2 O 3 coating exhibited a smaller current density (2.1 × 10 −6 A/cm 2 ) in comparison with those of bare substrate and Al coating (158.4 × 10 −6 and 3.1 × 10 −6 A/cm 2 , respectively), which was mainly ascribed to the pore-free microstructure and high resistance to corrosion of Al 2 O 3 phase. A favorable microhardness value of 95.3 HV was achieved for Al/Al 2 O 3 coating, approximately 1.8 times higher than that of Al coating (52.8 V), which was mainly ascribed to the dispersion hardening of Al 2 O 3 phase. Meanwhile, the Al/Al 2 O 3 coating significantly reduced wear volume from 2.8 mm 3 /m of Al coating to 0.4 mm 3 /m, showing great potential for weight reduction applications. K E Y W O R D S coating, corrosion, laser cladding, mechanical properties