On the basis of the calculation results of Phase Diagram Thermodynamics, the phase diagrams of Mg-6Al-XGd alloy system including vertical section, isothermal section at 200 and 500 oC were calculated using Calphad software Pandat. Five kinds of AM60 alloys with different Gd additions (0wt%, 0.8wt%, 1.2wt%, 1.6wt% and 2.0wt%) were prepared and the microstructures and mechanical properties were investigated. The results show that the grain sizes of the tested alloys are greatly reduced by addition of Gd. The mechanical properties such as ultimate tensile strength (UTS) and elongation (EL) are also improved at room temperature. The alloy containing 1.6wt% Gd exhibits the finest microstructure and best mechanical properties