Magnesium (Mg) is considered an attractive option for orthopedic applications due to its density and elastic modulus close to the natural bone of the body, as well as biodegradability and good tensile strength. However, it faces serious challenges, including a high degradation rate and, as a result, a loss of mechanical properties during long periods of exposure to the biological environment. Also, among its other weaknesses, it can be mentioned that it does not deal with bacterial biofilms. It has been found that making composites by synergizing its various components can be an efficient way to improve its properties. Among metal oxide nanoparticles, magnesium oxide nanoparticles (MgO NPs) have distinct physicochemical and biological properties, including biocompatibility, biodegradability, high bioactivity, significant antibacterial properties, and good mechanical properties, which make it a good choice as a reinforcement in composites. However, the lack of comprehensive understanding of the effectiveness of Mg NPs as Mg matrix reinforcements in mechanical, corrosion, and biological fields is considered a challenge in their application. While introducing the role of MgO NPs in medical fields, this article summarizes the most important results of recent research on the mechanical, corrosion, and biological performance of Mg/MgO composites.