AbstractAZ91 and AZ91–xGd (x = 0.5, 1.0, 1.5 wt%) magnesium alloys are extruded into plates. The addition of Gd promotes the formation of Al2Gd, effectively reducing the volume fraction of the β‐Mg17Al12 phase and making the banded structures of the extruded magnesium alloys thinner. The corrosion weight loss tests and electrochemistry analyses demonstrate that Gd significantly improves the pitting resistance of the AZ91 in 3.5‐wt% NaCl solution saturated with Mg(OH)2. Slow strain rate tensile tests show that in a corrosive environment, compared with AZ91, the elongation to failure of the AZ91–1.0Gd alloy is increased by 47%, and the alloy exhibits excellent stress corrosion resistance in this study. The fracture mode of AZ91 is changed from typical intergranular fracture to a mixture of transgranular and intergranular fracture in the corrosion solution by adding Gd. The mechanism of Gd to improve the stress corrosion resistance of the AZ91 magnesium alloy is that Gd increases the corrosion resistance, especially the pitting of AZ91.