Microstructure, mechanical, in vitro and in vivo behavior of extruded Mg alloys with varying Zn/Gd ratios, Mg‐2Gd‐2Zn‐0.5Zr (Zn/Gd = 1), Mg‐2Gd‐6Zn‐0.5Zr (Zn/Gd = 3), and Mg‐10Gd‐1Zn‐0.5Zr (Zn/Gd = 0.1) were investigated. The results revealed that the major secondary phases such as W (Mg3Zn3Gd2), (Mg,Zn)3Gd, LPSO (Long period stacking order) and I (Mg3Zn6Gd) phase in alloys depended on Zn/Gd ratio. These second phases influenced the mechanical as well as biological characteristics of the alloys. Among studied alloys, Mg‐10Gd‐1Zn‐0.5Zr alloy showed the highest yield strength and tensile strength of 270 (±9.29) and 330 MPa (±15.8), respectively, with a reasonably good elongation of 12% (±2.36). The presence of Gd2O3 in the degradation film of Mg‐10Gd‐1Zn‐0.5Zr enhanced the resistance offered by the film, which resulted in its lowest biodegradation, better viability, and cell proliferation under in vitro condition. The short term (subcutaneous implantation in rats for 1 month) in vivo studies showed that the alloy Mg‐10Gd‐1Zn‐0.5Zr degraded at a rate of 0.35 mm/y (±0.02) and did not induce any toxicity to the vital organs.