In this study, the crystal structure and mechanical property of AZ80-2%Li Mg alloy are investigated. Experimental results show that the density of AZ80 Mg alloy can be reduced to be 1.71 g/cm3 by addition of 2wt% Li. The as-extruded AZ80-2%Li Mg alloy exhibits a two-phase microstructure of α and β phases, with fine strips along the extrusion direction. The fracture strain increases significantly with increasing deformation temperature, and the tensile strengths hardly change at below 100oC. The tensile strength increases, but fracture strain decreases, with increasing strain rate. The 400°C solid-solution treated AZ80-2%Li Mg alloy will produce the AlLi precipitate after aging at 170°C, and produce the Mg17Al12 precipitate after aging at 250°C. The AZ80-2%Li Mg alloy with aging at both 170°C and 250°C will exhibit the phenomenon of precipitation hardening.