The Effects of Li content and annealing treatment on microstructure and damping capacity for Mg-X%Li alloys have been investigated, based on experimental results from X-ray diffractometry (XRD), optical microscopy (OM), hardness tests and vibration damping tests in a flexural mode. The Mg-X%Li alloys containing Li of 3%, 8% and 13% consist of α (HCP) single phase, (α + β (BCC)) dual phases and β single phase, respectively. In as-rolled state, the damping capacity for Mg-Li alloys shows a similar level regardless of Li content. The annealing treatments at 200oC and 400οC give rise to an enhancement of damping capacity only for the Mg-3%Li and Mg-8%Li alloys containing α phase, and at the same annealing temperature, the Mg-3%Li alloy with fully α structure exhibits higher damping capacity. This result indicates that the damping capacity of Mg-Li alloys depends principally on α phase, and that the annealing treatment is necessary to improve its damping capacity.