As promising biodegradable materials with nontoxic degradation products, magnesium (Mg) and its alloys have received more and more attention in the biomedical field very recently. Having excellent biocompatibility and unique mechanical properties, magnesium‐based alloys currently cover a broad range of applications in the biomedical field. The use of Mg‐based biomedical devices eliminates the need for biomaterial removal surgery after the healing process and reduces adverse effects induced by the implantation of permanent biomaterials. However, the high corrosion rate of Mg‐based implants leads to unexpected degradation, structural failure, hydrogen evolution, alkalization, and cytotoxicity. To overcome these limitations, alloying Mg with suitable alloying elements and surface treatment come highly recommended. In this area, open questions remain on the behavior of Mg‐based biomaterials in the human body and the effects of different factors that have resulted in these challenges. In addition to that, many techniques are yet to be verified to turn these challenges into opportunities. Accordingly, this article aims to review major challenges and opportunities for Mg‐based biomaterials to minimize the challenges for the development of novel biomaterials made of Mg and its alloys.