The effect of diffusion coating of Nd on the corrosion performance of Mg-1.2%Nd-0.5%Y-0.5%Zr-0.4%Ca alloy (EW10X04) used as a new structural material for biodegradable implants was evaluated in a simulated physiological electrolyte. The initial Nd layer with a thickness of 1 μm was obtained by a physical vapor deposition process in an electron gun evaporator. This was followed by a diffusion coating process carried out at high temperature in a protective atmosphere. The microstructure of the diffusion coating system was examined using scanning electron microscopy, X-ray diffraction and X-ray photoelectron spectroscopy analysis. The corrosion resistance was evaluated by potentiodynamic polarization and electrochemical impedance spectroscopy in a simulated physiological electrolyte in the form of 0.9% NaCl solution saturated with Mg(OH)2. The results of the corrosion tests clearly demonstrated that the corrosion resistance of the alloy with the diffusion coating layer was significantly improved compared to the base alloy. This was mainly due to the relatively continuous network of the secondary passive phase Mg41Nd5 that acts as an effective corrosion barrier and the beneficial effect of enriching the oxide film with Nd and Nd oxides such as Nd2O3 and Nd6O11. Copyright © 2013 Acta Materialia Inc. Published by Elsevier Ltd. All rights reserved.