In our previous work, the effect of Gd alloying on the oxidation resistance of AZ80 alloy was revealed briefly. However, a comprehensive understanding of the oxidation and corrosion resistance of the oxide layer formed on the Gd alloying AZ80 alloy surface needs to be developed. Thus, in this research, the high-temperature oxidation behaviors, oxidation products, and oxide layer characteristics of AZ80, AZ80-0.47Gd, and AZ80-0.75Gd (wt%) alloys were investigated at 420 °C. The corrosion protection of the oxide layer formed on the alloy surface was evaluated. The results showed that Gd alloying eliminated the content of the low melting point phase of β-Mg17Al12 and promoted the generation of a high melting point phase of Al2Gd. Gd2O3 appeared in the oxide layer and facilitated the propagation of homogeneous oxidation as well as densification of the oxide layer. In addition, the firm oxide layer showed characteristics of a blurred boundary with the magnesium matrix. After immersion of the oxide layer containing gadolinium oxide, the products of corrosion were massively nodulated, leading to the passivation of corrosion. This research provides new ideas for magnesium alloy protective layer preparation via a high-temperature oxidation technique.