Magnesium alloys like AZ31B are gaining popularity in the automotive and aerospace industries due to their lightweight properties. However, their susceptibility to corrosion and non-magnetic nature limit their application in environments requiring both durability and magnetic functionality. This study explores the enhancement of corrosion resistance and potential magnetic properties of AZ31B alloy through Plasma Electrolytic Oxidation (PEO) coatings infused with magnetic ions. Potentio-dynamic polarization (PDP) testing is conducted to evaluate corrosion resistance, while water contact angle measurements assess the hydrophobicity of the coated surface. Scanning Electron Microscopy (SEM) and Electron Backscatter Diffraction (EBSD) analyses provide insights into the microstructural evolution and chemical composition of the coatings. The incorporation of magnetic ions into the oxide layer aims to modify surface characteristics, potentially introducing magnetic behavior while maintaining structural integrity. The findings contribute to the optimization of PEO processes for multifunctional coatings, enhancing both durability and performance for advanced technological applications.