Magnesium and its alloys are light weight, biodegradable materials. They can be used as metal implants which maintain strength and integrity for the time of recovery, followed by natural dissolution in the body preventing the necessity of implant removal. In addition to the general biocompatibility and biodegradability requirements, these materials have to fulfill specific demands depending on the application: stiffness, formability, ductility, strength, fatigue resistance, pitting resistance etc. The objective of this study is to develop novel magnesium alloys by modifying the commercial AZ80 alloy, which are biocompatible, have high strength and a predictable dissolution rate and degradation mechanism. Rare earth elements, Nd and La as well as Y and Mn are considered as alloying additions in amounts <1.2 wt%. The modified alloys are compared on the basis of microstructure, room temperature mechanical properties and corrosion rate in simulated body fluid (SBF). Modified AZ80 alloys discussed in this study show significantly improved mechanical properties compared to AZ80. Pitting resistance on the other hand, significantly improved by rare earth additions.