Biodegradable Mg alloys have the potential to replace currently used metallic medical implant devices, likely eliminating toxicity concerns and the need for secondary surgeries, while also providing a potentially stimulating environment for tissue growth. A recently developed Mg–Ca–Sr alloy possesses advantageous characteristics over other Mg alloys, having a good combination of strength and degradation behavior, while also displaying potentially osteogenic properties. To better understand the effect of alloy degradation products on cellular mechanisms, in vitro studies using human bone marrow‐derived mesenchymal stem cells were conducted. Ionic products of alloy dissolution were found to be nontoxic but changed the proliferation profile of stem cells. Furthermore, their presence changed the progress of osteogenic development, while concentrations of Mg in particular appeared to induce stem cell differentiation. The work presented herein provides a foundation for future alloy design where structures can be tailored to obtain specific implant performance. These potentially bioactive implants would reduce the risks for patients by shortening their healing time, minimizing discomfort and toxicity concerns, while reducing hospital costs. © 2017 The Authors Journal of Biomedical Materials Research Part B: Applied Biomaterials Published by Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater, 106B: 697–704, 2018.