This paper shows the results of applying a combination of high energy processing and magnesium (Mg) as an alloying element in a strategy for enhancing the degradation rate of iron (Fe) for applications in the field of non-permanent medical implants. For this purpose, Fe powder was milled with 5 wt% of Mg (Fe5Mg) and its microstructure and characterized degradation behavior. As-received Fe powder was also milled in order to distinguish between the effects due to high energy processing from those due to the presence of Mg. The powders were prepared by high energy planetary ball milling for 16 h. The results show that the initial crystallite size diminishes from >150 nm to 16 nm for Fe and 46 nm for Fe5Mg. Static degradation tests of loose powder particles were performed in Hanks’ solution. Visual inspection of the immersed powders and the X-ray diffraction (XRD) phase quantification indicate that Fe5Mg exhibited the highest degradation rate followed by milled Fe and as received Fe, in this order. The analysis of degradation products of Fe5Mg showed that they consist on magnesium ferrite and pyroaurite, which are known to present good biocompatibility and low toxicity. Differences in structural features and degradation behaviors of milled Fe and milled Fe5Mg suggest the effective dissolution of Mg in the Fe lattice. Based on the obtained results, it can be said that Fe5Mg powder would be a suitable candidate for non-permanent medical implants with a higher degradation rate than Fe.