This paper reports on an atomic-scale investigation into the β′ precipitates and the long-period stacking ordered phase (LPSO) in Mg–5Y–2.5Ni–0.5Zr (at.%) alloy, using Cs-corrected high angle annular dark field-scanning transmission electron microscopy (HAADF-STEM). The results displayed that the 18R-type and 14H-type LPSO phases coexisted in the as-cast and the solid solution states, and the 18R-type and 14H-type LPSO structures were thermal stable. After aging treatment, the aging peak hardness reached 138 HV at 225 °C for 48 h. The significant increase in hardness was attributed to the formation of the metastable β′ phase. The lattice parameters of a and b axes for β′ phases are a = 0.65 nm, b = 2.20 nm, and c = 0.52 nm by HAADF-STEM. The interaction between the LPSO phase and the β′ can be found. The atomic-scale interactions between the LPSO and β′ phases are divided into two parts: under-aging and peak-aging conditions between the building blocks.