A laser surface melting (LSM) technology was applied to enhancing the corrosion resistance of a Mg−Zn−Y alloy containing large and discontinuous long-period stacking-ordered (LPSO) phases. The microstructural evolution and solidification behavior of this alloy during LSM were studied. It was demonstrated that the significantly reduced corrosion rate of the alloy after LSM, can be attributed to the disappearance of the original micron-sized LPSO phase and a decrease in the grain size from 300 to 15 μm. The refined grains were composed of three adjacent zones, namely the β eutectic phase zone, the W phase zone, and the lamellar structures zone, which formed sequentially during the rapid cooling process. The dendritic lamellae grew along the basal plane of the magnesium matrix and were separated by supersaturated α-Mg phases. Ultimately, the disappearance of large primary batteries and grain refinement improved the corrosion resistance of the Mg−Zn−Y alloy.