Abstract. Mg alloys have various advantages. However, the low formability due to the poor ductility of Mg alloys limits their engineering applications. In this study, an Mg-3%Gd alloys was chosen to explore processing approaches for improving its strength and ductility combination. The alloy was processed by accumulative roll-bonding (ARB) at 400℃ to 4 cycles followed by annealing at various temperatures. The microstructures after annealing were characterized by the electron backscatter diffraction technique and the mechanical properties were measured by a tensile test. It was found that the alloy has a good combination of strength and ductility after 2 cycle ARB processing followed by annealing at 290℃ for 1h. The strength is 2.3 times higher than that of the fully annealed coarse grained alloy, and the elongation is comparable with that of fully annealed coarse grained counterpart. The good mechanical properties were related to the fine-sized heterogeneous microstructures and weakened texture.