Abstract: Magnesium (Mg) alloys are gaining great consideration as body implant materials due to their high biodegradability and biocompatibility. However, they suffer from low corrosion resistance and antibacterial activity. In this research, semi-powder metallurgy followed by hot extrusion was utilized to produce the magnesium oxide@graphene nanosheets/magnesium (MgO@GNS/Mg) composite to improve mechanical, corrosion and cytocompatibility characteristics. Investigations have revealed that the incorporation of MgO@GNS nanohybrids into Mg-based composite enhanced microhardness and compressive strength. In vitro, osteoblast cell culture tests show that using MgO@GNS nanohybrid fillers enhances osteoblast adhesion and apatite mineralization. The presence of MgO@GNS nanoparticles in the composites decreased the opening defects, micro-cracks and micro-pores of the composites thus preventing the penetration of the corrosive solution into the matrix. Studies demonstrated that the MgO@GNS/Mg composite possesses excellent antibacterial properties because of the combination of the release of MgO and physical damage to bacterium membranes caused by the sharp edges of graphene nanosheets that can effectively damage the cell wall thereby facilitating penetration into the bacterial lipid bilayer. Therefore, the MgO@GNS/Mg composite with high mechanical strength, antibacterial activity and corrosion resistance is considered to be a promising material for load-bearing implant applications.