The effects of Cd on the microstructure and the mechanical properties of Mg-Cd magnesium alloy were investigated. The Mg-Cd binary magnesium alloy was analyzed by metallograph, XRD, SEM and EDS examinations. The results show that the microstructure of the Mg-Cd magnesium alloy is refined obviously by adding a little amount of Cd. When Cd addition(wt%) is from 0% to 0.7%, the alloy is composed of α-Mg matrix. Cd dissolves in the matrix to form a solid solution, and there is no new phase formed, which contributes to the increase of the impact toughness, Brinell hardness of the experimental alloy by 52.9%, 11.9%, respectively. With the Cd content increasing, the mechanical properties of Mg-Cd magnesium alloy are improved accordingly