Magnesium alloys are potential materials in biodegradable hard tissue implants. Their degradation products in the physiological environment not only affect the degradation process but also influence the biological response of bone tissues. In the work reported here, the composition and structure of the corrosion product layer on AZ91 magnesium alloy soaked in a simulated physiological environment, namely simulated body fluids (SBFs), are systematically investigated using secondary electron microscopy (SEM), Fourier transform infrared (FTIR) spectroscopy, x-ray photoelectron spectroscopy (XPS), x-ray diffraction (XRD), and in situ monitoring of the corrosion morphology. Our results show that the corrosion product layer comprises mainly amorphous magnesium (calcium) phosphates, magnesium (calcium) carbonates, magnesium oxide/hydroxide, and aluminum oxide/hydroxide. The magnesium phosphates preferentially precipitate at obvious corrosion sites and are present uniformly in the corrosion product layer, whereas calcium phosphates nucleate at passive sites first and tend to accumulate at isolated and localized sites. According to the cross sectional views, the corrosion product layer possesses a uniform structure with thick regions several tens of micrometers as well as thin areas of several micrometers in some areas. Localized corrosion is the main reason for the nonuniform structure as indicated by the pan and cross-sectional views. The results provide valuable information on the cytotoxicity of magnesium alloys and a better understanding on the degradation mechanism of magnesium alloys in a physiological environment.