There has been a tremendous amount of research in the past decade to optimize the mechanical properties and degradation behavior of the biodegradable Mg alloy for orthopedic implant. Despite the feasibility of degrading implant, the lack of fundamental understanding about biocompatibility and underlying bone formation mechanism is currently limiting the use in clinical applications. Herein, we report the result of long-term clinical study and systematic investigation of bone formation mechanism of the biodegradable Mg-5wt%Ca-1wt%Zn alloy implant through simultaneous observation of changes in element composition and crystallinity within degrading interface at hierarchical levels. Controlled degradation of Mg-5wt%Ca-1wt%Zn alloy results in the formation of biomimicking calcification matrix at the degrading interface to initiate the bone formation process. This process facilitates early bone healing and allows the complete replacement of biodegradable Mg implant by the new bone within 1 y of implantation, as demonstrated in 53 cases of successful long-term clinical study.