Halloysite nanotubes (HNT) and benzotriazole (BTA) loaded HNT were added to a silicate-based electrolyte to produce PEO coatings on AM50 alloy. The coatings were characterised by SEM, EDX and XRD methods. Corrosion behaviour in 3.5 wt.% NaCl was studied by EIS and PDP scans. The HNT increased coating scratch resistance greater than BTA-HNT, although the latter enhanced corrosion resistance due to a self-healing effect. This was triggered by a dense Mg(OH)2 film being formed on corrosion sites following partial coating degradation, preventing pitting corrosion. The single-step process for producing self-healing PEO coatings has good potential in corrosion protection of Mg.