The objectives of this study were to reduce the corrosion rate and increase the cytocompatibility of AZ31 Mg alloy. Two coatings were considered. One coating contained MgO (MAO/AZ31). The other coating contained Cu2+ (Cu/MAO/AZ31), and it was produced on the AZ31 Mg alloy via microarc oxidation (MAO). Coating characterization was conducted using a set of methods, including scanning electron microscopy, energy-dispersive spectrometry, X-ray photoelectron spectroscopy, and X-ray diffraction. Corrosion properties were investigated through an electrochemical test, and a H2 evolution measurement. The AZ31 Mg alloy with the Cu2+-containing coating showed an improved and more stable corrosion resistance compared with the MgO-containing coating and AZ31 Mg alloy specimen. Cell morphology observation and cytotoxicity test via Cell Counting Kit-8 assay showed that the Cu2+-containing coating enhanced the proliferation of L-929 cells and did not induce a toxic effect, thus resulting in excellent cytocompatibility and biological activity. In summary, adding Cu ions to MAO coating improved the corrosion resistance and cytocompatibility of the coating.