Recently, there is a growing interest in developing magnesium (Mg) based degradable biomaterial. Although corrosion is a concern for Mg, other physical properties, such as low density and Young’s modulus, combined with good biocompatibility, lead to significant research and development in this area. To address the issues of corrosion and low yield strength of pure Mg, several approaches have been adopted, such as, composite preparation with suitable bioactive reinforcements, alloying, or surface modifications. This review specifically focuses on recent developments in Mg-based metal matrix composites (MMCs) for biomedical applications. Much effort has gone into finding suitable bioactive, bioresorbable reinforcements and processing techniques that can improve upon existing materials. In summary, this review provides a comprehensive overview of existing Mg-based composite preparation and their mechanical and corrosion properties and biological responses and future perspectives on the development of Mg-based composite biomaterials.