Magnesium (Mg) alloys, a degradable material, have been studied for medical applications due to their excellent mechanical and chemical properties. However, their applications are limited by rapid corrosion. In this work, stearic acid and sodium stearate were used to treat the silane-induced calcium phosphate dihydrate coating to improve its protection for the Mg alloy further without changing the bone-like structure of calcium phosphate. The different effects of stearic acid treatment and sodium stearate treatment were compared. Electrochemical test and immersion test results confirmed that the corrosion resistance of the stearic acid-treated composite coating was greatly enhanced with a reduced corrosion current density by 3 orders of magnitude and hydrogen evolution reduced to 1/25 after 14 days. The stearic acid-treated coating also exhibited improved in vitro biocompatibility corroborated by promoted cell viability and better cell morphology.