Due to good biocompatibility and mechanical properties, magnesium (Mg) and its alloys are considered promising degradable materials for orthopedic applications. In this work, a Mg metal matrix composite (MMC) was fabricated using Mg-2.9Zn-0.7Zr alloy as the matrix and 1 wt% nano-hydroxyapatite (n-HA) particles as reinforcements. In vitro corrosion behavior and cytocompatibility of a Mg-Zn-Zr/n-HA composite and a Mg-Zn-Zr alloy were investigated. In contrast with the Mg-Zn-Zr alloy, the MMC has better properties. The average corrosion rate of MMC is 0.75 mm/yr after immersion in simulated body fluid (SBF) for 20 days, and the surface of MMC is covered with white Ca-P precipitates. The electrochemical test results show that the corrosion potential (E(corr)) of MMC increases to -1.615 V and its polarization resistance (R(p)) is 2.56 KOmega with the addition of n-HA particles. The co-cultivation of MMC with osteoblasts results in the adhesion and proliferation of cells on the surface of the composite. The maximum cell density is calculated to be (1.85+/-0.15) x 10(4)/l after 5 days of co-culture with osteoblasts. The average cell numbers for two groups after culturing for 3 and 5 days (P<0.05) are significantly different. All the results demonstrate that the Mg-Zn-Zr/n-HA composite can be potentially used as biodegradable bone fixation material.