The microstructure and mechanical properties of aged Mg-5.5Al-0.5Y magnesium alloy with Sm addition were investigated. The results show that with proper content of Sm addition, the microstructure of Mg-5.5Al-0.5Y magnesium alloy is refined obviously. The quantity of β-Mg17Al12 phase is reduced, and Al2Sm particle phase is formed. With the increase of Sm addition, the mechanical properties of the alloy at room and elevated temperature increase at first, and then decrease. When the content of Sm is up to 1%, the values of tensile strength and elongation at room temperature,150 and 175 are up to their maxima synchronously, 244MPa/20.07%, 217MPa/18.86% and 185MPa/19.15% respectively.