Magnesium alloy ZE41, used extensively in the aerospace industry, possesses excellent mechanical properties albeit poor corrosion resistance. This paper investigates the mechanism of corrosion and the interaction between the grain boundary intermetallic phases, the Zr-rich regions within the grains and the bulk Mg-rich matrix. The results of optical and scanning electron microscopy (SEM) together with energy-dispersive X-ray (EDX) and atomic force microscopy (AFM) potential map measurements have shown the importance of the microstructure in the initiation and propagation of corrosion in an aqueous environment, indicating that the Zr-rich regions play a distinct role in the early stages of corrosion in this alloy.