The neotype magnesium alloy, Mg-Nd-Zn-Zr (NZK) alloy, was implanted into the rabbit femur to investigate its in vivo degradation behavior and biocompatibility. Seventy-two New Zealand white rabbits were randomly divided into the NZK alloy group, titanium alloy group and sham-operated group. Then NZK alloy rods were embedded in the rabbit femur in the NZK alloy group, titanium alloy rods were embedded in the titanium alloy group, and only bone tunnel was established in the sham-operated group. Prior to surgery and at 1, 7, 14, 28 and 56 days after operation, the serum alanine transaminase, creatinine, creatine kinase and magnesium ion concentration were examined in each group. An X-ray of the implanted region was taken at 7, 14, 28 and 56 days after implantation. The pathological changes in heart, liver, kidney and bone from the implant region were examined at 28 and 56 days postoperatively. The degradation behavior of the NZK alloy was observed using scanning electron microscope with an energy dispersive spectroscopy system. There were no significant differences in serum alanine transaminase, creatinine, creatine kinase and magnesium ion concentrations among each group at the same time point (P>0.05). The histology of heart, liver, kidney and bone from implant region was altered. The results demonstrate that the NZK alloy implanted into the rabbit femur could be absorbed gradually, and that the NZK alloy has excellent biocompatibility in vivo.