A new composition sand-casting magnesium alloy, Mg-6Zn-2Gd-0.6Zr, was developed. It was found that the room temperature mechanical properties of the alloy were superior: b=270MPa, 0.2=175MPa, =8%. Meanwhile, the elevated-temperature strength and creep resistance were significantly improved, comparing with Mg-5Zn-0.6Zr (ZK51) commercial magnesium alloy. The as-cast microstructure of the alloy was mainly consisted of (Mg) matrix, (+Mg3Gd2Zn3+Mg3Gd) eutectic phase, which was distributed along the (Mg) grain boundary with coarse netted shape. After solid-solution treatment and subsequently aging treatment for the alloy, the secondary phases re-precipitated as fine discontinues semi-netted or short rod-like precipitations, also including some fine spherical precipitations in the matrix, which were responsible for the properties improvement of the alloy.