The behavior of extruded Mg–Gd–Al–Zn magnesium alloys at elevated temperatures was studied to elucidate the effect of intermetallic compounds on thermal stability, grain coarsening mode, and grain growth kinetics. The presence of the fine and widely distributed intermetallic (Mg,Al)3Gd phase in the extruded microstructure of the Mg–4.8Gd–1.2Al–1Zn alloy was found to be quite effective in inhibiting grain growth. This was not the case for the Mg–3Gd–3Al–1Zn alloy, where the extruded microstructure showed that the grain boundaries are not effectively pinned by the main Al2Gd intermetallic phase. The grain coarsening situation was found to be more severe for the Mg–6Al–1Zn alloy because no second phases were present to pin the grain boundaries at elevated temperatures. The simultaneous presence of Al and Gd was found to be helpful in increasing the solidus temperature, and in this way, it further contributes to increasing thermal stability of the magnesium alloys. The abnormal grain growth occurred by penetrating into grain boundaries of smaller grains and by the formation of discrete islands inside large abnormal grains, which provided evidence for the occurrence of the solid-state wetting mechanism in this magnesium alloy.