High-pressure die-casting Mg–2.6RE–xY (EW) alloys with Y contents between 0 and 3% (in wt%) were investigated for their microstructure and tensile properties. In the Y-containing alloy, the intermetallic phases at the grain boundaries consisted of skeletal Mg12RE phase, bulk Mg24Y5 phase and irregular Mg3Y phase, while {011} twins were observed in the Mg12RE phase. The yield strength was improved by Y addition at both room temperature and high temperatures. Compared with Y-free alloy, the yield strength of 3% Y alloy increased from 143.1 to 174.8 MPa and improved by 22.2% at room temperature, while it was increased from 72.2 to 104.6 MPa and enhanced by 44.9% at 300 °C. The area fraction of intermetallic phase increased dramatically from 14.5 to 18.4% with 3% Y addition. Second phase strengthening was the major contributor to the yield strength increase at ambient temperature. The increment of the area fraction of the high-thermally stable Mg–RE intermetallic phases with Y addition contributed to the consequent improvement in yield strength at high temperatures. At ambient temperature, the mechanism for the fracture of EW alloys was a ductile and quasi-cleavage fracture blend.