The ZK60 deformed magnesium alloy is treated by micro‐arc oxidation (MAO) and processed in the optimized silicate–phosphate electrolyte system, which is controlled under the two‐step current‐decreasing mode. The mechanism of discharge in the MAO process is investigated using the voltage–time curve and morphology of the spark discharge at different durations. The microstructures of the coatings fabricated at different durations are investigated. The rules of the coating ingrowth and/or outgrowth, the formation mechanisms of micropores, and microcracks in the coatings are explored systematically. The corrosion resistance of the coatings is measured by electrochemical methods. Through the exploration of the mechanism, two types of micropores in the coating are summarized: the in situ discharge growth type and the pores‐sealed type, and also three types of microcracks. The results illustrate the changes of the elements on the surface of the coating and Mg, O, and Si are incorporated into the coating formation process. The specimens show the best corrosion resistance after the two‐step current‐decreasing mode treatment.