Herein, the effect of calcium (Ca) microalloying on the microstructure and mechanical properties of Mg94Zn2.5Y2.5Mn1 alloy is identified. The long‐period stacking‐ordered (LPSO) phase transformation mechanism during solid‐solution treatment and hot deformation behavior during extrusion process are analyzed. The role of minor (0.34 at%) Ca addition in the as‐cast alloy is related to the fine microstructure and abundant 18R‐LPSO phase. Furthermore, the precipitation of 14H‐LPSO phase is greatly induced by Ca addition in subsequent solid‐solution treatment. As for as‐extruded alloys, the dynamic precipitation behavior of W phase nanoparticles is found. The high‐density W phase nanoparticles suppress the dynamic recrystallization (DRX) behavior and inhibit the growth of dynamical recrystallized (DRXed) grains. The as‐extruded Ca‐modified alloy shows a superior mechanical property with yield strength (YS), ultimate tensile strength (UTS), and elongation of 400, 434 MPa, and 19.5%, respectively. The tiny microstructure, W phase nanoparticles, and kinky LPSO (both 18R and 14H type) phase are the reasons for the outstanding mechanical properties.