This is a report on the structure phases and precipitates in a newly developed Mg-10Dy-3Al-1Zn-0.2Zr alloy. Specimens from the cast alloy were heat treated at temperatures of 480 • C, 520 • C and 560 • C, all for 8 and 16 h, and subsequently quenched. The structures were then analysed using scanning and transmission electron microscopy, while the mechanical properties were investigated using microhardness measurements. The results showed the different temperatures, as well as times, influence both the chemical composition and morphology of the precipitated phases. The occurrence of the β-phase changed with increasing temperature and time from grain boundary segregations through fine elongated particles to coarse plate-like precipitates. Polygon-shaped Dy-rich precipitates were observed in all the samples; however, their size decreased and their distribution homogenised with increasing annealing temperature and time. The samples annealed at 520 • C and 560 • C exhibited the presence of lamellar 18R-type long period stacking ordered (LPSO) phases. Microhardness measurements were in accordance with results of the microscopic analyses; although the values varied between 60 and 65 HV for all the material states, the most uniform distribution was observed for the 560 • C/8-h sample, which featured the finest precipitates and LPSO phases.