A packed powder diffusion coating (PPDC) treatment produced two intermetallic layers on the surface of the commercial magnesium alloy AZ91E. The β-phase (Mg 17 Al 12 ) was immediately on top of the AZ91E, on top of which was the τ-phase (Mg 32 (Al,Zn) 49 ). Nanoindentation showed that the elastic modulus and hardness of each of the intermetallic compounds was significantly greater than that of the AZ91E substrate. Staircase displacement bursts occurred during nanoindentation of the intermetallic compounds, attributed to the combination of incipient plasticity at low loads, and the development of dislocation networks due to dislocation pile ups around the indentation at higher loads. Crystallographic analysis of β phase orientations using EBSD showed that the nanomechanical properties of the intermetallic compound produced through PPDC treatment were isotropic.