Fine-grained magnesium alloys strengthened by quasicrystalline particles were easily developed by thermomechanical process for Mg-Zn-Y-Zr alloys. The microstructure evolution of Mg-Zn-Y-Zr alloys hot rolled with different reductions at different temperatures was studied. Tensile tests and fracture observation were carried out to study the mechanical properties of this alloy. The thin magnesium sheets hot rolled at 380℃exhibit better combination of high strength and ductility than that hot rolled at lower temperature. The results show that the grains become equiaxed and uniform as compared with those of the extruded materials because of recrystallization and repeated heating between rolling passes. It is also found that with the increasing rolling temperature and strain theⅠ-phase particles become much smaller and are homogeneously distributed in the matrix, which enhances both strength and ductility.