The evolution of the microstructure and mechanical properties of alloy system with nominally composition 1.2, 2.4, 3.6, 4.8,6) is evaluated based on computational phase diagram and corresponding experimental studies. The results show that grains are significantly refined with the increase of Gd content. The main phases of as-cast alloys are α-Mg, β-Li, AgLi 2 Mg, and Mg 3 Gd. With the increase of Gd content, the amounts of Mg 3 Gd phase and β-Li phase have been increased. When the Gd content exceeds 3.6 wt%, Mg 3 Gd phase precipitates in a form of the network at the grain boundaries. The precipitation of β-Li can be attributed to the competitive dissolution of Zn, Gd, and Li in Mg. Meanwhile, γ″ is formed after the addition of Gd, which grows and transforms into γ′ with the increase of Gd content. In solidification process, stacking faults are formed by solid transformation of partial α-Mg and Mg 3 Gd. Eventually, with the synergistic effect of Mg 3 Gd, β-Li, and γ″ (or γ′), as the Gd content increasing, the tensile strength of the alloy first increases, then decreases, and the elongation decreases. When the content of Gd is 4.8 wt%, the ultimate tensile strength and yield strength reach the maximum values of 227 MPa and 139 MPa, and the elongation is 18.1%, respectively.