Abstract This study provides an insight into the synthesis of high-strength and corrosion-inhibiting Mg-based biodegradable implant material by the addition of rare earth oxide material for acicular cruciate ligament reconstruction applications. The matrix has been reinforced with a naturally occurring mineral, hydroxyapatite (Ca5(PO4)3OH) and rare earth oxide, neodymium oxide (Nd2O3), in different concentrations. The mechanical response has been assessed by analyzing the samples’ microhardness, ultimate compressive, and tensile strength. In contrast, the corrosion rates were calculated using phosphate buffer saline solution by using different techniques under suitable physiological conditions. The microstructure characterization has been carried out by field emission scanning electron microscope, electron dispersive spectroscopy, optical microscopy, and X-ray diffraction techniques. Moreover, the surface properties of the composites were assessed using surface roughness and contact angle measurements. The sample showed maximum hardness at a concentration of 1.5% rare earth oxide. Moreover, the highest ultimate compressive and tensile strength followed the same order, i.e., 1.5% > 2% > 1%. In addition, the microstructure analysis revealed a refined microstructure and the formation of secondary intermetallic phases. Resistance to dislocation and grain growth barricading were the prominent features highlighted in the study for enhanced mechanical and corrosion properties. Moreover, the hydrogen evolution was lower for Mg–HA–1.5Nd2O3 samples, which was a clear indication of a reduced corrosion rate.