Magnesium alloys have attracted significant attention in recent years as biodegradable metals. However, their degradation mechanisms in vivo remain insufficiently understood. The present work investigates the degradation mechanism of AZ91 magnesium alloy in a critical-size rat defect model over an 8-week period in vivo, employing advanced characterization techniques such as transmission electron microscopy (TEM) and nanobeam electron diffraction (NBED). The degradation layer is observed to consist of three distinct sub-layers: a dense and compact poor crystallinity layer (PCL) layer primarily composed of calcium phosphate, a loose and porous amorphous layer (AL) of magnesium/calcium phosphate, and a hybrid layer (HL)layer containing degradation channels and composed of magnesium/calcium phosphate, layered double hydroxide (LDH), and magnesium hydroxide. The corrosion resistance of AZ91 is enhanced by the presence of the compact PCL layer, the uniform distribution of the Mg₁₇Al₁₂ phase, and the formation of impervious LDH at the corrosion interface. The degradation is primarily driven by micro-galvanic corrosion, which is influenced by the interaction between the Mg matrix and the Mg₁₇Al₁₂ phase. These findings provide critical insights into the stable degradation mechanism of Mg-Al alloys in vivo, advancing the development of biodegradable magnesium-based implants.