Mg-Zn-Gd have great potential for biomedical applications owing to excellent bioactivity and non-toxicity properties. In the present study, laser surface melting (LSM) was carried out on newly developed Mg-1Zn -2Gd (wt%) alloy. Effects of laser energy on microstructural evolution, corrosion properties, surface energy, and hardness have been investigated. The surface modified sample processed at different energy densities showed fine grain structure in the melt zone compared to the untreated substrate. Grain refinement in the laser melted region improved the hardness by 60%. The surface roughness was found to be increased with increasing laser energy density. At higher energy density, removal of materials from the surface is enhanced, resulting in deeper grooves and higher surface roughness. The wettability studies indicated that the variations in surface geometry, grain size and surface roughness of LSM samples strongly influence the surface energy and hydrophilicity. Improved wetting of LSM sample was achieved owing to grain refinement and low surface roughness. The corrosion resistance determined by immersion and electrochemical methods of laser melted sample in Hank’s balanced salt solution improved considerably due to grain refinement, meltpool depth and uniform distribution of secondary phases.