The microstructures and properties of GWN751K magnesium alloy in different states were investigated by OM, SEM, TEM and XRD. The results show that the microstructure of the as-cast alloy is composed of α-Mg and net-like eutectic phase and σb=215 MPa, σ0.2=187 MPa and δ=3.5% with a low temperature endothermic peak in DSC curve. After 535 oC, 16 h heat treatment, the eutectic structure decomposes and the Mg-Y rich phases remain in the boundary with grains growing up obviously. Mechanical properties become better with σb=240 MPa, σ0.2=189 MPa and δ=10%, and the low temperature endothermic peak disappears. After extrusion, the dynamic recrystallization occurs and as a result the mechanical properties are increased obviously with σb=320 MPa, σ0.2=260 MPa and δ=18%; the main reason is that the high-density dislocation and fine grains can greatly increase the strength and elongation. After aging at 220 oC for 6 h, the average ultimate tensile strength is over 400 MPa but the elongation is decreased sharply. In the as-cast alloy, the secondary cracks were observed along the grain boundaries, mainly at the inside of eutectics. After 535 oC, 16 h heat treatment and extrusion, the secondary cracks mainly locate at the grain interior.