The electronic structure of Mg alloy was calculated with the recursion method. The result shows that the density of states of Mg in grain is similar to that on the surface of Mg alloy，but it is obviously different when O or O，H atoms exist on the surface of Mg alloys. This indicates Mg has similar properties whether in grain or on surface，but the properties of Mg change apparently after oxygen or hydrogen atom permeated in the surface layer of Mg alloy. Al，Y or La atom diffuses from grain to the surface and segregates there，because each the doped atom embedding energy of Al，Y or La atom on the surface is lower than that in grain. The affinity energy of Al-O，Y-O，La-O，Mg-O，Mg-O-H is negative，so they can form compound. Because the affinity energy of Mg-O-H is lower than that of Mg-O，Mg(OH)2 is more stable than MgO. In the early stage of oxidation，oxygen combined with Mg，Al，Y or La forming oxide. When Mg alloy is in corrosive medium，MgO reacts with H2O forming Mg(OH)2. Al2O3，（Y，La）2O3 and Mg(OH)2 can protect Mg alloys from corrosion and improve corrosion resistance.