The present investigation explores the influence of nano-ZrO2 particles on the corrosion and scratch behavior of magnesium matrix composites. Ultrasonic vibration-assisted stir casting method has been employed for the fabrication of composites containing varying ZrO2 nanoparticles concentrations (0.5, 1, 1.5, and 2 wt%). After fabrication, composites are exposed to neutral and alkaline solutions for corrosion tests. For neutral solution, 3.5 wt% NaCl and for alkaline, 0.5 M NaOH solutions are considered in this study. Microstructural analysis of cast composites using scanning electron microscopy (SEM) and energy-dispersive X-ray spectroscopy (EDX) reveals almost uniform particle distribution within the matrix phase. Electrochemical techniques are employed to evaluate the corrosion resistance of the formed composites and cast base alloy in both corrosive environments. Incorporation of 1 wt% ZrO2 nanoparticle shows optimal corrosion resistance in 3.5 wt% NaCl solution, while 0.5 wt% ZrO2 exhibits best performance when exposed to 0.5 M NaOH solution. Further increase of ZrO2 concentration led to a deterioration of corrosion performance in both environments. A comprehensive understanding of the corrosion mechanisms has also been obtained through detailed analysis of the corroded surfaces using SEM and EDX. A scratch test has been conducted to assess the impact of varying nano ZrO2 concentrations and applied loads (ranging 5N to 20N) on scratch-induced wear and friction coefficient of AZ31-ZrO2 nanocomposites and base alloy. A reduction in wear volume with higher ZrO2 content and a rise in the average friction coefficient with an increase in load have been observed.