The introduction of rare-earth (RE) elements into magnesium (Mg) alloys can significantly improve their ductility, thereby extending the applications of Mg products. However, the impacts of their chemical composition, temperature and processing methods on the mechanical properties of Mg products are highly debatable. In this work, we systematically investigate the deformation behaviors of Mg–Nd and Mg–Zn–Nd alloys using electron backscattered diffraction (EBSD) characterization. The samples were deformed to different stress levels to study the microstructure and texture development during channel die compression. The results reveal that the room temperature formability of the Mg–Nd alloy can be enhanced with the addition of Zn. This is attributed to the higher activities of prismatic slip and tensile twinning in the Mg–Zn–Nd alloy as compared to the binary counterpart, facilitating strain accommodation. When the strain increases, the growing and merging of the same twin variant rapidly consumes the parent grain, which is responsible for the texture modification from the transverse to the basal direction. At elevated temperatures, the twinning is suppressed in both alloys due to the decreased critical resolved shear stress of the non-basal slip systems. Additionally, an obvious sigmoidal yielding phenomenon is observed due to the multiple activation of the different deformation modes. These findings offer valuable insights into the evolution of the microstructure and texture during plane strain compression, elucidating the connections between material chemical composition, processing and mechanical properties, which are important for the advancement of Mg alloy application.