The effects of semi-solid (quenching or air cooling) and hot extrusion on the microstructure and mechanical properties of Mg-3.88Zn-1.56Gd (wt.) alloy were studied. The results show that after semi-solid quenching, the second phase presents nano eutectic lamellar structure in the alloy, while after semi-solid air cooling, the second phase presents trigeminal island, block and micron lamellar structure in the alloy. After secondary extrusion, the semi-solid + extruded alloy presents typical bimodal structure due to incomplete recrystallization. Compared with the non semi-solid alloy, the semi-solid + extruded alloy exhibit higher strength. The main reason for the performance enhancement of the alloy is due to the formation of bimodal structure. The fine grains provide the grain boundary strengthening, while the coarse grains without recrystallization produce the strengthening effect by inhibiting the base plane slip. The second important reason is the refinement of quasicrystal phase and its dispersion in the matrix.