Magnesium (Mg) and its alloys are of much interest as promising third-generation bio-materials for bone implant applications; however, challenges remain for the alloy's mechanical integrity and bio-corrosion behaviour. Therefore, appropriate alloying elements and surface-modification techniques are required to overcome these limitations. Zinc and scandium were found to possess good biocompatibility and biodegradability, in addition to magnesium. This study aims to enhance the mechanical integrity and bio-corrosion resistance behaviour of a novel Mg-1wt% Zn-0.5wt% Sc cast alloy by laser shock peening surface treatment with multiple passes (LSP-2 pass and LSP-3 pass). The microstructural and texture evolution was investigated using various techniques, including field emission scanning electron microscopy with energy-dispersive spectroscopy (FESEM-EDS), optical microscopy (OM), X-ray diffraction (XRD) analysis, electron back-scattered diffraction analysis (EBSD), as well as the surface residual stress, wettability, microhardness, tensile strength, electrochemical polarization test, and biocompatibility were analysed on as-cast, LSP-2 pass and LSP-3 pass specimens. LSP induced beneficial compressive residual stress around the surface and sub-surface region of Mg-1Zn-0.5Sc alloy due to severe plastic deformation, which led to grain refinement through the twinning mechanism of the Mg alloy. Also, the dispersion of second-phase particles (β-ScZn) was observed while analysing the XRD profiles. Strain hardening, grain refinement, and precipitate strengthening have contributed to the structure and texture evolution, which enhanced the microhardness, tensile strength, ductility, and corrosion resistance of the Mg-1Zn-0.5Sc alloy. From in vitro studies, a low rate of corrosion in simulated body fluid and less cytotoxic behaviour were observed for the LSP-3 pass Mg-1Zn-0.5Sc alloy.