Magnesium as a candidate metallic biomaterial for biodegradable orthopedic implants was evaluated in-vitro in terms of degradation behavior, biocompatibility and mechanical property both in macro- and micro-scale. Micro structure of pure Mg and AZ61 after degradation in both simulated body fluid (SBF) and cell culture environment were analyzed. Different from AZ61, pure Mg degraded at a higher rate and attracted large amount of salt precipitation which formed a layer covering the surface. Much less pitting degradation and salt deposition were observed on both pure Mg and AZ61 in cell culture environment compared to in SBF. After culturing for 7 days, EAhy926 cells growing on AZ61 showed significant higher proliferation rate as of cells growing on pure Mg. Higher proliferation rates indicated that cells grew better on slow-degrading AZ61 than on fast-degrading pure Mg. Cells growing on AZ61 proliferated much better and assembled together to form a consistent tissue-like micro-structure, while cells spread and reached out on the surface of pure Mg, possibly due to low cell density and lack of cellular communication. The elastic modulus and tensile yield strength of magnesium are closer to those of natural bone than other commonly used metallic biomaterials. It was shown that Mg was biodegradable, biocompatible and had appropriate mechanical strength, thus Mg and its alloys showed great potential for deployment in a new generation of biodegradable orthopedic implants.