Second phases play a significant role in the development of high-performance magnesium alloys with rare earth elements. Here, in situ tensile tests combined with synchrotron radiation were carried out to investigate the deformation behavior of β phases in a WE (Mg–Y–Gd–Nd) alloy. By lattice strain analysis, it was found that micro load continuously transferred from the soft α-Mg matrix to the hard β phases during the whole plastic deformation, while this behavior was much more obvious at the beginning of deformation. Based on diffraction peak broadening, Williamson–Hall (W–H) plotting was used to study the microstrain of β phases. The results showed that the microstrain of β phases increased rapidly within 4% plastic strain and reached the maximum at plastic strain of ~6.5%. Since the β phases acted as hard phases, the microstrain was considered as a sign of the stress concentration near phase interfaces. It was also suggested that the effective release of local stress concentration at the β/α-Mg interface benefited the ductility of the WE alloy by the plastic deformation of β phases and phase interface sliding.