The microstructure and mechanical properties of Mg-Zn-Y-Nd-Zr alloys were studied in this research. Results show that the added Nd element partially replaces the Y element in the W phase (Mg₃Zn₃Y₂), forming a new secondary phase Mg₃Zn₃(Y, Nd)₂. A typical bimodal structure consisting of fine equiaxed recrystallized grains and coarse elongated unrecrystallized grains can be observed in the alloy after thermal extrusion. The Nd addition promotes the dynamic recrystallization during hot extrusion. With increasing the Nd content, the dynamic recrystallization ratio is increased, and the overall texture strength of the as-extruded alloy is weakened. The addition of Nd element refines the grains and improves the mechanical properties of Mg-Zn-Y-Zr alloy. When 0.5wt% Nd is added, the mechanical properties of as-extruded alloy show a good combination of high strength and high plasticity: the yield strength is 362 MPa, the ultimate tensile strength is 404 MPa, and the elongation is 10.2%. After aging treatment, the tensile strength of the alloy is further improved, and the ultimate tensile strength of the alloy after peak aging treatment reaches 421 MPa. The high strength of the Mg-Zn-Y-Nd-Zr alloy is mainly attributed to ultrafine recrystallized grains and precipitation strengthening.