The present work aims to understand the effect of zinc and rare-earth element addition (i.e., 2 wt% Gd, 2 wt% Dy, and 2 wt% of Gd and Nd individually) on the microstructure evolution, mechanical properties, in vitro corrosion behavior, and cytotoxicity of Mg for biomedical application. The microstructure results indicate that the Mg–Zn–Gd alloy consists of the lamellar long period stacking ordered phase. The electrochemical and immersion corrosion behavior were studied in Hanks balanced salt solution. Enhanced corrosion resistance with reduced hydrogen evolution volume and magnesium (Mg2+) ion release were estimated for the Mg–Zn–Gd alloy as compared to the other two alloy systems. At the early stage of corrosion, formation of the oxide film inhibited the corrosion propagation. However, at the later stages, the breaking of the oxide film leads to shallow pitting mode of corrosion. The ultimate tensile strength of Mg–Zn–Gd–Nd is better than the other two alloys due to the uniform distribution of the Mg12Nd precipitate phase. The moderate strength in the Mg–Zn–Gd alloy is due to the low volume fraction of the secondary phase. The MTT (methylthiazoldiphenyl-tetrazolium bromide) assay study was carried out to understand the cell cytotoxicity on the alloy surfaces. Studies revealed that all three alloys had significant cellular adherence and no adverse effect on cells.