The physical characteristics and microstructure of the fluoride film formed during activation were investigated using SEM, XPS and SAM, and its stability in electroless nickel (EN) bath was analyzed. The effects of the fluoride film on EN deposition were studied additionally. The results show that the fluoride film on magnesium alloys is a kind of porous film composed of MgF2 with thickness of 1.6-3.2 μm. The composition of the activation bath and pretreatment of EN processing have influence on the composition of the fluoride film. The fluoride is stable and dissolves little in EN bath; as a result, the fluoride film can protect magnesium substrate from the corrosion of EN bath. The composition of fluoride determines the initial deposition of EN and part of the fluoride film finally exists as inclusion in EN coating.