The microstructures and mechanical properties of Mg–6Zn–5Al–4Gd–1RE (RE = Ce or Y) alloys were investigated. The addition of Ce or Y obviously refines the grain size for the Mg–6Zn–5Al–4Gd-based alloy, while the Y element has a better refining effect. The Ce and Y show different grain-refining mechanisms: Ce addition mostly promotes the growth of secondary dendrite, while Y addition mainly increases the heterogeneous nucleation sites. The hardness-versus-aging time curves indicate that all the alloys have excellent aging-hardening behavior, but the response to maximum hardness was delayed by the Ce or Y addition. The microstructure observation of the peak-aged alloys indicated a large number of nanocrystalline τ-Mg32(Al, Zn)49 precipitates in the matrix. The Y addition is beneficial to improve the mechanical properties, and the alloy has optimal values. However, the Ce addition decreases the ultimate tensile strength and elongation of the alloy due to formation of a lot of shrinkage porosities.