Commercial magnesium alloys have a great potential for structural applications in automotive due to their significant weight saving. However, they have poor creep resistance at temperature over 125℃, thus making them inadequate for power train applications such as engine pistons, which are operated at temperature up to 300℃. Recently, creep resistant magnesium alloys with rare-earth elements and zinc have been developed and it is suggested that Mg-2Zn-10Y-5Gd-0.5Zr alloy is promising as a candidate material for the engine piston application. However, the detail strengthening mechanism is not clear, hence the detail microstructure of Mg-Zn-(Y, Gd) alloys was investigated in this paper. Gravity casting was performed with Mg-Zn-(Y, Gd)-Zr alloy, followed by T6 treatment. In the as cast condition, both Mg₁₂(Y, Gd)Zn and Mg₂₄(Y, Gd)₅ were observed at the α-Mg grain boundaries, while metastable Mg₂₄(Y, Gd)₅ was dissolved into α-Mg matrix and surplus (Y, Gd) and Zn were precipitated on the Mg₁₂(Y, Gd)Zn via solution heat treatment at 535℃. After the aging treatment for 24 hours at 225℃, fine β′ precipitates were formed in α-Mg matrix.