Effects of isothermal heat treatment temperature near the phase transition temperature and holding time on the microstructures of Mg97Zn1Y2 alloys with LPSO structure were studied. Meanwhile, the evolution mechanism was discussed. The main results shows that the long - period structure has a tendency of growing with the increase of time，when the temperature of solid-solution treatment is 500℃. It is found that the dendrite structure of Mg97Zn1Y2 alloy can be transformed into spherical crystal by isothermal heat treatment. When the insulation temperature range of the alloy is from 540℃ to 600℃, the size of microstructures changes in the order of large-small-large, in other words, it is coarsened, separated and spheroidized, and finally coarsened. The trend of microstructure evolution is from dendritic to irregular spherical and massive, and finally spherical at the isothermal heat treatment temperature of 575 ℃. When the holding time is of 15min, its microstructures are rounded spherical crystal.