Magnesium alloys were studied extensively as a class of biodegradable metallic materials for medical applications. In the present study, ZK60 magnesium alloy was considered as a candidate and the micro-arc oxidation (MAO) treatment was adopted in order to reduce the degradation rate of the alloy. The in vivo degradation behaviors and biological compatibilities of ZK60 alloys with and without MAO treatment were studied with a transcortical model in rabbits. The implant and the surrounding bone tissues were characterized by CT, SEM and histological methods at 2, 4 and 12weeks after the implantation. The results demonstrated that both the bare and MAO-coated ZK60 alloys completely degraded within 12weeks in this animal model. The MAO coating decreased the degradation rate of ZK60 alloy and enhanced the response of the surrounding tissues within the first 2weeks. After then, an acceleration of the degradation of the MAO-coated ZK60 alloy was observed. It was found that the alloy could be degraded before the complete degradation of the MAO coating, leading to the local peeling off of the coating. An in vivo degradation mechanism of the MAO-coated ZK60 alloy was proposed based on the experimental results. The severe localized degradation caused by the peeling off of the MAO coating was the main reason for the acceleration of the degradation of the MAO-coated ZK60 alloy.