Mg-5Y-3Nd-Zr-xGd (x=0 and 4 wt.%) alloys were prepared by metal mould casting, and aging behavior, mechanical properties and fracture morphology were investigated. The result shows that after T6 treatment, the massive eutectic phase in as-cast alloys dissolved and finer Mg5RE phase precipitated dispersively in the matrix, and mechanical properties were improved simultaneously. Mg-5Y-3Nd-4Gd-Zr alloy exhibits good age hardening behavior and the peak hardness is about 20% higher than the Gd-free alloy. Gd addition can significantly improve mechanical properties of the alloy especially at the elevated temperature. The ultimate tensile strength and yield strength of Mg-5Y-3Nd-4Gd-Zr alloy at 250°C, with the value of 276 and 168 MPa, respectively, are over 20% higher than those of the Gd-free alloy. It is mainly attributed to the increase and homogeneous distribution of the fine heat-resistant Mg5RE precipitate in the matrix.