Magnesium (Mg) alloys show outstanding promise for development of degradable implants for hard tissue engineering. However, rapid corrosion and associated reductions in mechanical properties has limited their clinical application. Furthermore, bacterial infections remain an ongoing challenge for implants. Previously, we established that the magnesium alloy, AZ31(Mg-3%Al-1%Zn-0.4%Mn) in a fully annealed form, exhibits improved biocompatibility and corrosion resistance over both pure Mg and cold-extruded AZ31. Multi-omics analyses of tissues of Sprague-Dawley (SD) rats revealed that annealed AZ31 does not significantly activate inflammation and immune responses, while it enhanced signalling in tissue cell proliferation associated pathways. Furthermore, we employed coatings incorporating the host defence peptide (CHDP), caerin 1.9 (abbreviated as F3) into a biocompatible polymer, polycaprolactone (PCL), to develop functional 3-dimensional surface coating to improve biocompatibility and antibacterial performance of the Mg alloy materials. In this study, we have assessed the responses from MC3T3-E1 cells cultured with the Mg alloys to further understand cellular responses. The annealed AZ31 alloy stimulated proliferation of mice osteoblast precursor cells and caused upregulation in expression of Brpf1 protein and other signalling pathways related to bone mineralization and haemostasis, which promote bone tissue formation. The coated and annealed AZ31 alloy (F3-PCL-3A) demonstrated exceptional biocompatibility, causing no adverse effects on hepatic or renal function, and displaying no observable changes in vital organs three months after implantation in SD rats. F3-PCL-3A displayed long-lasting and stable antibacterial properties both in vitro and in vivo. Proteomics and metabolomics analyses of tissues in direct-contact with implants revealed that F3-PCL-3A did not activate inflammation or immune-associated signalling pathways in SD rats 3 months post-implantation. Meanwhile, it activated inflammatory responses, especially phagocytosis pathways up to 72 hours post implantation, indicating enhanced antibacterial capability during the acute stage after implantation. In summary, F3-PCL-3A shows outstanding promise for degradable implants with active antibacterial capabilities for internal fixation and fracture repair.