The influence of intermetallic microstructure on the degradation of Mg-5Nd alloy with different heat treatments was investigated via immersion testing in DMEM + 10 pct FBS under cell culture conditions and subsequent microstructural characterizations. It was found that T4 heat-treated sample had the poorest corrosion resistance due to the lack of finely dispersed precipitates inside grains, continuous lamellar particles along grain boundaries and outer Ca-P layer, and to the formation of a loose corrosion product layer. In contrast, the aged samples exhibited a better corrosion resistance due to their presence and to the formation of a compact corrosion layer. Their degradation behavior largely depended on the intermetallic microstructure. Corrosion was initiated in the matrix around stable globular particles Mg₄₁Nd₅ at grain boundaries. In the sample aged at high temperature 245 °C, the coexistence of lamellar Mg₄₁Nd₅ particles and their nearby Nd-poor regions enhanced the corrosion. The corrosion first started in such regions. It was shown that those finely dispersed precipitates formed during aging had no influence on the corrosion initiation. However, they indeed affected the subsequent corrosion propagation with the immersion proceeding. They supplied barriers for corrosion propagation and hence were beneficial for improving the corrosion resistance. The continuously distributed lamellar Mg₄₁Nd₅ precipitates formed at grain boundaries during aging at 245 °C supplied an additional effective obstacle to corrosion propagation. This was especially beneficial for hindering the corrosion propagation at the later stage of corrosion.