The effects of neodymium (Nd) and ytterbium (Yb) on the microstructures and tensile properties of Mg-5.5Zn-0.6Zr alloy were investigated. Results show that an addition of Nd or Yb both brings about the precipitation of a new γ (Mg, Nd) Zn2 or γ (Mg, Yb) Zn2 eutectic phase and results in a refinement in dendritics. However, the combination addition of Nd and Yb has an opposite effect on dendritics and leads to the formation of γ (Mg, Nd+Yb) Zn2 eutectic phases in the shape of network-like, even the lamellar eutectics are somehow thickened. After T4 solution treatment, the eutectic structure in Mg-5.5Zn-0.6Zr alloy is fully dissolved into the matrix while there are still some undissolved compounds at grain boundaries in Mg-5.5Zn-0.6Zr alloy with Nd and Yb addition. A new ternary phase Mg-Zn-Yb appears in Mg-5.5Zn-0.6Zr alloy containing Yb, which is formed at dendrite boundaries after solution treatment. The tensile test results indicate that the tensile strength, yield strength and the elongation are about 255.6 MPa, 163.6 MPa and 17.4%, respectively, at room temperature. This is mainly attributed to combined strengthening factors induced by Yb addition. At the elevated temperature, the Mg-5.5Zn-0.6Zr alloy with addition combination of Nd and Yb has a good performance in thermal stability, but inferiority in elongation.