Magnesium oxychloride cement (MOC) has been used in civil engineering as it exhibits a relatively high early strength and a low coefficient of thermal expansion. Its poor water resistance, although, has prevented its widespread use. Steady degradation when immersed in an aqueous environment, however, could be a beneficial property for a resorbable bone replacement. In this study, we have evaluated how different concentrations of phosphoric acid may be used to enhance water resistance providing some control over the rate of degradation. The phase compositions, microstructures, mechanical properties, and the degradation of MOC have been evaluated. As a preliminary assessment of biological suitability, the response of a population of bone marrow stromal cells to the surface was evaluated. X‐ray diffraction data demonstrate that 5Mg(OH)2·MgCl2·8H2O (phase 5) was formed in all MOC samples. The MOC modified with H3PO4 exhibits good water resistance and can sustain strength in aqueous medium and by adjusting H3PO4 concentration; degradation speed may be controlled. Cells cultured on the surface of the MOC attached and retained viability over the duration of the study. © 2014 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 103A: 194–202, 2015.