Mg-1.5Y alloy sheet was prepared by cross-rolling technology. The effect of recrystallization annealing (475 ℃×15 min) on microstructure, macro-texture, mechanical properties and stretch formability of Mg-1.5Y alloy sheet was primarily studied. The results show that the uniform equiaxed grains were formed through strong static recrystallization after recrystallization annealing. The texture of as-rolled alloy sheet exhibited a subrotund-bimodal orientation distribution, and the basal-pole intensity peak tilts about ±20° from normal (ND) to rolling direction 2 (RD2). The texture orientation distribution was more dispersed and randomized after recrystallization annealing. The basal-pole intensity peak split along the intersection angle of rolling direction and a weakened butterfly-shaped multi-peaks texture orientation distribution was finally forming. Besides, the maximum intensity of basal plane decreased from 5.0 to 2.8. The fracture elongation and index of Erichsen test of as-annealed alloy sheet are 30.5% and 4.4mm respectively, which are improved about 63% and 42% compared with as-rolled alloy sheet.