The microstructure evolution and mechanical properties of Mg–10Gd–3Y–xZn–0.6Zr (x = 0.5, 1, and 1.5 wt%) alloys in the as-cast, solution-treated, and peak-aged conditions have been investigated systematically. The results indicate that the microstructure of the as-cast alloy with 0.5% Zn consists of α-Mg, (Mg,Zn)3RE and Mg24(RE,Zn)5 phases, while the alloy with 1.0 and 1.5% Zn consists of α-Mg, (Mg,Zn)3RE and some stacking faults. Moreover, 18R-LPSO phases are observed in the as-cast alloy with 1.5% Zn. The formation of LPSO phases involves not only stacking sequence ordered but also chemical composition ordered. After solution treatment, the Mg24(RE,Zn)5, (Mg,Zn)3RE, stacking faults, and 18R-LPSO phases transform into 14H-LPSO phases. The 14H-LPSO phase plays an important role in the improvement of mechanical properties, especially for the ductility. The β′ phase with a bco structure precipitates in the peak-aged alloys results in precipitation hardening, significantly improving the tensile strength, but it leads to poor ductility.