The microstructural evolution and mechanical properties of Mg-5Y-5Gd-xNd-0.5Zr magnesium alloys at different states were studied. The results reveal that island compounds at the grain boundaries of the as-cast alloys mainly were Mg 24 Y 5 , Mg 41 Nd 5 , and Mg 5 Gd phases. After homogenization at 808 K for 24 h, the distribution of the island compounds became discrete and Mg 5 Gd phases mostly decomposed and dissolved. With hot extrusion, the grain size was refined to about 20 μm on average, and both the strength and elongation were greatly improved. After ageing at 523 K for 5 h, the strength of different extruded alloys largely increased but the elongation decreased. With the increase of neodymium content, the strength of the alloys at different states increased. The content of neodymium element had an obvious effect on the elongation of the designed alloys. In the designed alloys, the Mg-5Y-5Gd-2.2Nd-0.5Zr alloy exhibited the best combination properties and its ultimate tensile strength, yield strength, and elongation could reach 380 MPa, 285 MPa, and 9.0%, respectively.