Magnesium (Mg) has been intensively studied as a promising alternative material to inert metallic alloys for orthopedic fixation devices due to its biodegradable nature inside the body and its favorable biocompatibility. However, the low mechanical strength and rapid corrosion of Mg in physiological environments represent the main challenges for the development of Mg-based devices for orthopedic applications. A possible solution to these limitations is the incorporation of a small content of biocompatible nanoparticles into the Mg matrix to increase strength and possibly corrosion resistance of the resulting nanocomposites. In this work, the effect of adding boron nitride (BN) nanoparticles (0.5 and 1.5 vol.%) on the mechanical properties, corrosion behavior, and biocompatibility of Mg-based nanocomposites was investigated. The properties of the nanocomposites fabricated using powder metallurgy methods were assessed using microstructure analyses, microhardness, compression tests, in vitro corrosion, contact angle, and cytotoxicity tests. A significant increase in the microhardness, strength, and corrosion rates of Mg–BN nanocomposites was detected compared with those of pure Mg (0% BN). Crystalline surface post-corrosion byproducts were detected and identified via SEM, EDX, and XRD. Biocompatibility assessments showed that the incorporation of BN nanoparticles had no significant impact on the cytotoxicity of Mg and samples were hydrophilic based on the contact angle results. These results confirm that the addition of BN nanoparticles to the Mg matrix can increase strength and corrosion resistance without influencing cytotoxicity in vitro. Further investigation into the chemical behavior of nanocomposites in physiological environments is needed to determine the potential impact of corrosive byproducts. Surface treatments and formulation methods that would increase the viability of these materials in vivo are also needed.