A Zinc-loaded montmorillonite (Zn-MMT) coating was hydrothermally prepared using Zn ion intercalated sodium montmorillonite (Na-MMT) upon magnesium (Mg) alloy AZ31 as bone repairing materials. Biodegradation rate of the Mg-based materials was studied via potentiodynamic polarization curves, electrochemical impedance spectroscopy (EIS) and hydrogen evolution tests. Results revealed that both Na-MMT and Zn-MMT coatings exhibited better corrosion resistance in Dulbecco's modified eagle medium (DMEM) + 10% calf serum (CS) than bare Mg alloy AZ31 counterparts. Hemolysis results demonstrated that hemocompatibility of the Na-MMT and Zn-MMT coatings were 5%, and lower than that of uncoated Mg alloy AZ31 pieces. In vitro MTT tests and live-dead stain of osteoblast cells (MC3T3-E1) indicated a significant improvement in cytocompatibility of both Na-MMT and Zn-MMT coatings. Antibacterial properties of two representative bacterial strains associated with device-related infection, i.e. Escherichia coli (E. coli) and Staphylococcus aureus (S. aureus), were employed to explore the antibacterial behavior of the coatings. The measured inhibitory zone and bacterial growth rate confirmed that Zn-MMT coatings exhibited higher suppression toward both E. coli and S. aureus than that of Na-MMT coatings. The investigation on antibacterial mechanism through scanning electron microscopy (SEM) and lactate dehydrogenase (LDH) release assay manifested that Zn-MMT coating led to severe breakage of bacterial membrane of E. coli and S. aureus, which resulted in a release of cytoplasmic materials from the bacterial cells. In addition, the good inhibition of Zn-MMT coatings against E. coli and S. aureus might be attributed to the slow but sustainable release of Zn ions (up to 144 h) from the coatings into the culture media. This study provides a novel coating strategy for manufacturing biodegradable Mg alloys with good corrosion resistance, biocompatibility and antibacterial activity for future orthopedic applications. STATEMENT OF SIGNIFICANCE: The significance of the current work is to develop a corrosion-resistant and antibacterial Zn-MMT coating on magnesium alloy AZ31 through a hydrothermal method. The Zn-MMT coating on magnesium alloy AZ31 shows better corrosion resistance, biocompatibility and excellent antibacterial ability than magnesium alloy AZ31. This study provides a novel coating on Mg alloys for future orthopedic applications.