In the present study, the sputtering process deposited tantalum oxide thin film onto AZ31B alloy, and the biocompatibility and degradation resistance were evaluated. The phase analysis by X-ray diffraction (XRD) and transmission electron microscopy (TEM) was carried out to understand the Ta-based thin films’ crystalline and amorphous nature thin film. The thin film surface chemical composition was investigated by X-ray Photoelectron Spectroscopy (XPS) which showed the elemental signals of O, Ta without any other impurities. Contact angle measurements verified the hydrophobic nature of the coated specimens. The corrosion studies revealed that corrosion resistance was significantly enhanced for the Ta-based thin-film coated Mg alloys than the uncoated bare counterpart by reducing corrosion current density from 2.886 × 10−4 to 1.20 × 10−5 A/cm2. Bioactivity of the coated specimens in SBF immersion showed apatite formation in 5 days. The hemocompatibility studies of the coatings showed the echinocytes morphology of the RBCs. In vitro, MTT assay exhibited more significant cell proliferation and cell viability of 100% at 7 days of incubation. The cell morphology studies showed improved cell attachment and cell growth by controlling magnesium ions' release into the cell culture media.