The use of bioabsorbable metals as temporary medical implants has attracted considerable research interest as they do not require a second surgical operation for removal after the healing process is completed. However, magnesium (Mg) and its alloys have a degradation rate that is too high in biological environments. Therefore, it must be controlled using various strategies. In this study, an AZ31-Mg-based alloy coated with CeO2 is investigated to analyse the effect of the coating on its corrosion protection and biocompatibility. The AZ31 alloy is anodised with NaOH solution, before coating to stabilise the alloy surface. The CeO2 coating is deposited on anodised AZ31 by chemical conversion treatment. The electrochemical properties of samples are evaluated using electrochemical impedance spectroscopy and cyclic polarisation curves using Hank’s solution. Structural and morphological characterisation of the samples are performed using X-ray diffraction and scanning electron microscopy–energy dispersive X-ray spectroscopy. Additionally, biocompatibility is determined by live/dead assay using MC3T3-E1 pre-osteoblasts. The preliminary results indicate that CeO2 coatings exhibit higher electrochemical properties. Additionally, an increase in the ratio of live/dead cells of the AZ31OH-CeO2 surface is detected, in contrast with AZ31, thus indicating improvement in biocompatibility upon CeO2 coating.