Hypospadias is a common congenital malformation of the male urogenital system. As a recently arisen reconstruction method for hypospadias, polymer tissue engineering urethral scaffold often results in necrosis and other complications due to the lack of bioactivity. To improve the bioactivity of polymer, in this work, we prepared biodegradable Mg/poly(lactic-co-glycolic acid) (PLGA) composite nanofiber scaffolds by electrospun with 3, 6, and 9 wt.% of micron-scale Mg particles. The mechanical properties of the PLGA scaffold gradually decrease with the addition of Mg particles but still at an acceptable level. On the other hand, these composite scaffolds show very good biocompatibility and promotional bioactivity, namely non-cytotoxicity, gradual proliferation enhancement, and good adhesion state of human adipose stem cells (HADSCs) on the scaffold surface. Besides, through quantitative real-time polymerase chain reaction (qRT-PCR) test, different genes expression levels of human umbilical vein endothelial cells (HUVECs) were also gradually up-regulated with the increase in Mg content. The present results indicate that Mg containing PLGA scaffolds might not only have the potential to promote tissue regeneration related to urethral repair, but also stimulate endothelial cells to achieve vascularization and anti-inflammatory functions. Consequently, considering both the mechanical properties and bioactivity for clinical demand, the Mg/PLGA composite scaffolds with suitable Mg contents are promising for the regeneration of defective urethral tissues.