This study investigates the impact of varying extrusion ratios on the microstructure and mechanical properties of AlSiCuFeMnYb alloy. Following hot extrusion, significant enhancements are observed in the microstructure of the cast rare earth aluminium alloy. Within the cross-sectional microstructure, the α-Al phase is reduced in size, and its dendritic morphology is eliminated. The morphology of the eutectic Si phase transitions from long strips to short rods, fine fibres, or granular forms. Similarly, the Fe-rich phase changes from a coarse skeletal and flat noodle shape to small strips and short skeletal forms resembling Chinese characters. The CuAl2 phase evolves from large blocks to smaller blocks and granular forms, while the Yb (Ytterbium)-rich rare earth phase shifts from large blocks to smaller, more uniformly distributed blocks. In the longitudinal section, the structure aligns into strips along the extrusion direction, with the spacing between these strips decreasing as the extrusion ratio increases. At an extrusion ratio of 22.56, the alloy demonstrates superior mechanical properties with a tensile strength of 325.50 MPa, a yield strength of 254.44 MPa, a hardness of 143.90 HV, and an elongation of 15.47%. These represent improvements of 27.8%, 36.5%, 38.9%, and 236.4%, respectively, compared with the as-cast rare earth alloy. In addition, the fracture surface of the extruded rare earth alloy exhibits obvious ductile fracture characteristics. Additionally, the alloy undergoes dynamic recrystallisation and dislocation entanglement during hot extrusion. The emergence of a twinned Si phase and a dynamically precipitated nanoscale CuAl2 phase are critical for enhancing deformation strengthening, modification strengthening, and dynamic precipitation strengthening of the extruded alloys.