The microstructures evolution of the Mg-6Gd-2Y alloy were investigated deeply during homogenizing and then aging treatment by OM,SEM, EDS, XRD, HRTEM in this paper. It was found that the microstructure of the as-cast alloy mainly consisted of α(Mg) equiaxed grains and eutectic compound Mg5(Gd,Y) with some non-equilibrium particles Mg2(Gd,Y). With the solution time prolonging, the α(Mg) grains did not significantly grow. The size of semi-continuous Mg5(Gd,Y) eutectic compound was shrinked gradually, and disappeared finally. And many fine RE-rich particles (Mg (Gd,Y) 2) with fcc structure were formed in the grain boundaries, which prevented the growth of α(Mg) grains. Age-hardening of the alloy at 175℃ was most obvious. β" phase was precipitated from α(Mg) matrix in the early-aging period(4-32h). β'' phase was formed in the rapid-aging precipitation period(32-100h). β" and β'' phase were mainly precipitation in the α(Mg) at the peak-aging stage(100h). β'' phase was transitioned to β1 ,which was transformed to stable β phase gradually at the over-aging stage (after 100h).