A new technology for surface self-nanocrystallization of Mg-15Gd-3Y magnesium alloy induced by HVOF (high velocity oxygen-fuel flame) microparticles impact at low temperature was investigated, and the influencing rule of the surface layer deformation and nanocrystallization with different processing parameters were analyzed. It is found that diameter size of the impacting steel shots, bombardment distance and treating time have an important influence on the microstructure of deformed layer and microhardness distribution with depth. The deformation characteristics and nanocrystallization effect of the top surface layer of magnesium alloy specimen with the surface self-nanocrystallization were investigated by optical microscopy (OM) and transmission electron microscopy (TEM), respectively. Meanwhile, the microhardness distribution from the topmost surface to the matrix of the specimen was tested by a microhardness tester. The phase of surface layer in the specimen before and after treatment was analyzed using X-ray diffractometer (XRD). Results show that surface self-nanocrystallization of the magnesium alloy is realized by the new technology, verified by the TEM testing results, and grain size of the top surface layer is refined to about 20 nm. The microhardness of the most top surface layer is increased up to above twice as that of the substrate. No oxide of the magnesium alloy is found in top surface layer of the treated specimen.