In situ phosphatizing coating (ISPC) was invented and patented in 1994, where in situ phosphatizing reagent (ISPR) was shown to form a dense interfacial phosphate layer on and bond strongly with metal substrates, and simultaneously link with covalent bonds to the polymer top-layer. In this paper, we report the synthesis of ISPR-catalyzed polysilsesquioxane (PSSQ) oligomers by the sol-gel method. Using different amounts of ISPR, the well-defined nanonetwork structures of PSSQ were characterized by SEM. The dispersion of ISPR-catalyzed PSSQ in ISPC to form a stable and compatible organic-inorganic hybrid (ISPC/PSSQ) nanocoating was carried out. The nanocoating was applied on AlMg alloys (AZ31A, AZ31B and AZ91D), and the corrosion performance was characterized by salt spray test (ASTM B117) and electrochemical impedance spectroscopy (EIS). The cross-section of dry film nanocoating layer on AZ91D was characterized by TEM EDS elemental mapping analysis. It was shown that the ISPR-catalyzed PSSQ forms a dense and uniform interfacial passivation layer sited tightly on top of metal surface and beneath the polymer layer. A 400 nm thick interfacial passivation layer of PSSQ in the nanocoating on AZ91D was shown to pass 360 hours of salt spray test (≤ 0.5% corrosion area). The current and future development on self-healing of corrosion protection, Li as anodic protection for Mg in LiMg alloys and encapsulation and release of ISPC/PSSQ corrosion inhibitor in nanocontainer has been illustrated. The excellent corrosion protection performance of ISPC/PSSQ nanocoating on AlMg alloys will be discussed.