Microstructures of different state Mg-5Sr-10Y master alloys (as cast, as solutionized and as extruded) and their effects on the grain refinement of AZ31 magnesium alloy were investigated by OM, SEM and XRD. The results indicate that all the master alloys are composed of α-Mg, Mg17Sr2 and Mg24Y5 intermetallic compounds, but the morphology of the α phase and the form, the quantity and the size of the second phase are different, which lead to the different grain refinement efficiencies in AZ31 magnesium alloy. It is found that the extruded Mg-5Sr-10Y master alloy has the best grain refinement efficiency, then the as cast and solutionized in turn. The different grain refinement efficiencies of various master alloys are related to the heterogeneous nucleation and the constitutional undercooling