Magnesium (Mg)-based bone implants degrade rapidly in the physiological environment of the human body which affects their structural integrity and biocompatibility before adequate bone repair. Rare earth elements (REEs) have demonstrated their effectiveness in tailoring the corrosion and mechanical behavior of Mg alloys. This study methodically investigated the impacts of scandium (Sc) and terbium (Tb) in tailoring the corrosion resistance, mechanical properties, and biocompatibility of Mg–0.5Zn–0.35Zr–0.15Mn (MZZM) alloys fabricated via casting and hot extrusion. Results indicate that addition of Sc and Tb improved the strength of MZZM alloys via grain size reduction and solid solution strengthening mechanisms. The extruded MZZM–(1–2)Sc–(1–2)Tb (wt.%) alloys exhibit compressive strengths within the range of 336–405 MPa, surpassing the minimum required strength of 200 MPa for bone implants by a significant margin. Potentiodynamic polarization tests revealed low corrosion rates of as–cast MZZM (0.25 mm/y), MZZM–2Tb (0.45 mm/y), MZZM–1Sc–1Tb (0.18 mm/y), and MZZM–1Sc–2Tb (0.64 mm/y), and extruded MZZM (0.17 mm/y), MZZM–1Sc (0.15 mm/y), MZZM-2Sc (0.45 mm/y), MZZM-1Tb (0.17 mm/y), MZZM-2Tb (0.10 mm/y), MZZM–1Sc-1Tb (0.14 mm/y), MZZM-1Sc-2Tb (0.40 mm/y), and MZZM–2Sc–2Tb (0.51 mm/y) alloys, which were found lower compared to corrosion rate of high-purity Mg (∼1.0 mm/y) reported in the literature. Furthermore, addition of Sc, or Tb, or Sc and Tb to MZZM alloys did not adversely affect the viability of SaOS2 cells, but enhanced their initial cell attachment, proliferation, and spreading shown via polygonal shapes and filipodia. This study emphasizes the benefits of incorporating Sc and Tb elements in MZZM alloys, as they effectively enhance corrosion resistance, mechanical properties, and biocompatibility simultaneously.