In this paper, the microstructure and mechanical properties of Mg-4Y-3Nd-1.5Al alloy with different heat treatment conditions were carried out by microstructural analysis and mechanical property testing. The experimental results show that there are Mg5RE, Mg24RE5 and Al2RE intermetallic phases in as-cast Mg-4Y-3Nd-1.5Al alloy and the Mg5RE and Mg24RE5 phases dissolved into α-Mg matrix and Al2RE phases is stable in solid-solution treated Mg-4Y-3Nd-1.5Al alloy. The Mg-4Y-3Nd-1.5Al alloy has an obvious aging hardening effect and the mechanical property can be improved obviously by solution + aging treatment. The yield strength, ultimate tensile strength and elongation of Mg-4Y-3Nd-1.5Al alloy after solution (525℃×6h+550℃×12h)+peak aging (225℃×10h) are 85MPa, 262MPa and 6.5%, respectively. The high density and fine precipitation β" and β" are responsible for the excellent mechanical properties of heat treated Mg-4Y-3Nd-1.5Al alloy.