The microstructure of as‐extruded Mg–2Zn–2Al–0.3Mn–xY (0 ≤ x ≤ 5 wt%) alloys are investigated, revealing the influence of grain size and second‐phase particle size on the mechanical properties and corrosion resistance of alloys. Additionally, the alloy composition is optimized. In the results, it is indicated that all alloys undergo complete dynamic recrystallization. The average dynamic recrystallization grain size decreases, accompanied by the appearance of Al2Y and (Al, Zn)11Y3 particles whose contents and sizes increase as Y content increases. Therefore, the mechanical properties improve due to fine grain strengthening and fine particle dispersion strengthening, while corrosion resistance benefits also from the grain refinement at Y contents between 0 and 3 wt%. A rapid increase in size and number of larger second‐phase particles leads to a decrease in the alloys’ mechanical properties corrosion resistance, with excess addition of Y. Accordingly, an optimized Y addition is determined to be 3 wt% in this study.