Mg3Zn6Y quasicrystal particulate reinforced Mg-8Gd-3Y alloy was fabricated by adding the Mg3Zn6Y quasicrystal particles into the Mg-8Gd-3Y matrix alloy melt. The effect of volume fraction of quasicrystal particles on the microstructure of quasicrystal particulate reinforced Mg-8Gd-Y alloy was studied using XRD, SEM, TEM and HRTEM. It was found that Mg3Zn6Y quasicrystal particles were melted partly and only 1/3 of them were added into the matrix alloy. The quasicrystal particles distributed in the grain and grain boundary. At the same time, the intermetallic phase composition and the morphology in Mg-8Gd-3Y matrix alloy were changed. The interface between quasicrystal particles and α-Mg was smooth and clear, they combined closely each other and there is no obvious interface chemical reaction when the direction of electron beam was parallel to the 2-fold and 3-fold axes of icosahedral quasicrystal phase particles.