Oxidation of a rapidly solidified Mg-Ni-Y alloy was studied in a wide temperature range in air by means of TG, DSC, XRD, TEM, SEM/EDAX. The alloy was in different microstructural states and with a different phase composition depending on the temperature of oxidation. The oxidation kinetics have been found to obey different laws (linear, logarithmic, parabolic) at the different temperatures. At low temperatures of oxidation (200-350 o C) the alloy oxidizes slowly with linear kinetic law. In the temperature range of 350-430 o C generally a logarithmic model describes best the experimental kinetic data, as the initial stage of oxidation follows also a linear kinetic equation. At temperatures above 430 o C a parabolic law is valid. During further increase of the temperature, again a linear kinetic law was followed due to partial cracking of the oxide film. The rate constants, activation energies and pre-exponential factors were also derived. The products of oxidation, the morphology and microstructure of the oxide film, alloy matrix and oxide/alloy matrix interface were investigated. The phase composition and microstructure of the metal matrix do not differ very much from those resulting after annealing in a protective argon atmosphere. Grain growth proceeds with a low rate even after long term annealing at temperatures of about 400-450 o C. It was found that the oxide film consists of MgO and MgNiO 2 and traces of yttrium oxides. The outer layer of the scale is nanocrystalline. At the oxide/alloy matrix interface dense coarse crystals with most probable composition Mg 2 4 Y 5 were observed. The microscopic observations as well as the kinetic results indicate that the oxide film in Mg 8 7 Ni 1 2 Y 1 works successfully as a protective layer at temperatures up to 500-520 o C, retarding the oxygen transport in the scale and to the oxide/metal interface.