The Mg-48Zn-13Y quasicrystal master alloy with high volume fraction of the quasicrystalline phase was prepared by conventional solidification method. The influences of the MZY quasicrystal on microstructures and properties of AM50 alloys were investigated by OM, SEM, EDS, XRD and tensile tests. The results indicated that addition of the MZY quasicrystal to AM50 alloy, the Mg₃Zn₆Y quasicrystal phase could be left well in AM50 matrix alloy, and the microstructures were obviously refined. The β phase in the microstructures was changed from coarse and continuous to discontinuous strip and granular, and the amount was decreased. When the content of the MZY quasicrystal is up to 6%, the microstructure was greatly refined, and the ultimate tensile strength, yield strength and elongation of the alloy reached to the maximum, 206.63 MPa, 92.50 MPa and 10.04%, respectively. Compared with AM50 alloy, it is improved by 24.59%, 74.9% and 66.15%, respectively. Mechanical properties of AM50 magnesium alloy can be improved significantly by addition of the MZY quasicrystal, which results from the microstructure refinement, the optimization of the morphology and amount of the β phase and the dispersion strengthening effect of the quasicrystal phase has good wettability with the magnesium alloy substrate.