Hydroxyapatite (HA) nanoparticles were dispersed in AZ31 alloy by friction stir processing (FSP) to produce AZ31/HA metal matrix composites. The composite surface was acid treated using HNO3 and coated with polycaprolactone/HA (PCL/HA) mat by electrospinning. Coating parameters were optimized to obtain PCL/HA nanocomposite fibrous mat with an adhesion strength of 4B Grade (ASTM D3359-09 tape test) on AZ31/HA composite surface. Presence of HA on the substrate and in the coating helps in enhancing biomineralization and develop thick CaP layer on the surface which also facilitates controlled degradation in simulated body fluid at normal physiological conditions of pH 7.2 and 37 °C. Rat skeletal muscle cells culture study showed better adhesion and proliferation on coated samples compared to the uncoated samples. The combination of electrospun nanofibrous PCL/HA composite coating on acid pre-treated FSPed AZ31/HA composite surface seems to have the potential for biodegradable magnesium implant applications with enhanced bioactivity for tissue regeneration. © 2017 Elsevier B.V.