The high corrosion rate of Mg alloys has hindered their wider use in orthopedic applications. In order to decrease the corrosion rate and to improve the bioactivity, a modified nanocrystalline (NC) surface layer with an average grain size of 70nm and a thickness of 70m on the topmost surface of coarse-grained (CG) AZ31 alloy was successfully achieved by means of a surface nanocrystallization technique called sliding friction treatment (SFT). It showed that the extreme grain refinement in NC layer was favorably capable of enhancing the protective efficiency of the corrosion product layer and alleviating the susceptibility to localized corrosion. Moreover, SFT-induced second-phase particles fragmentation also helped to hinder micro-galvanic corrosion. Resultantly, the NC sample exhibited notably enhanced corrosion resistance as compared to the CG counterpart (e.g., the average hydrogen evolution rate of AZ31 during 170h immersion in simulated body fluid (SBF) solution was reduced from 0.12 to 0.068mLcm(-2)h(-1) after SFT processing). Meanwhile, the in vitro results confirmed that SFT processing enhanced the cytocompatibility of AZ31Mg alloy to osteoblasts, which also benefited from the improved corrosion resistance induced by grain size reduction. Therefore, our study suggests a promising approach for the fabrication of biodegradable Mg alloy with modified properties.