Magnesium alloys suffer from accelerated corrosion in physiological environment and hence their use as a structural material for biodegradable implants is limited. The present study focuses on a diffusion coating treatment that amplifies the beneficial effect of Neodymium on the corrosion resistance of magnesium alloys. The diffusion coating layer was obtained by applying 1 pm Nd coating on EW10X04 magnesium alloy using Electron-gun evaporator and PVD process. The coated alloy was heat treated at 350°C for 3 hours in a protective atmosphere of N2+0.2%SF6. The microstructure characteristics were evaluated by SEM, XRD, and XPS; the corrosion resistance was examined by potentiodynamic polarization and EIS analysis. The corrosion resistance of the diffusion coated alloy was significantly improved compared to the uncoated material. This was related to: (i) formation of Nd20s in the outer scale, (ii) integration of Nd in the MgO oxide layer, and (iii) formation of secondary phase Mg4iNds along the grain boundaries of a-Mg.