Fracture toughness was examined on a commercial Mg-Zn-Zr alloy, ZK60. The commercial alloy was extruded at a temperature of 493 K to obtain fine grain structures having fine spherical shaped precipitates. The microstructures consisted of equi-axed grains. The average grain size and the precipitate diameter were about 3 mm and 25 $ 50 nm, respectively. The yield strength and elongation-to-failure were 287 MPa and 26.7%, respectively. The plane-strain fracture toughness, K IC , was estimated to be 34.8 MPam 1=2 by the stretched zone analysis. These mechanical properties were superior to that of conventional wrought magnesium and magnesium alloys. The deformed microstructure observations showed i) the activation of non-basal dislocations even at room temperature and ii) the pinning of dislocations by the spherical shaped precipitates during the fracture toughness test. Thus, a combination of grain refinement and dispersion of fine spherical shaped precipitates were found to be effective methods for improving the fracture toughness of magnesium alloys.