This research meticulously investigates the effects of varying contents of Nd and Gd, along with various heat treatment conditions, on the microstructure and mechanical characteristics of Mg–4Y-Nd-Gd-0.4Zr (wt.%) alloys within the commercial WE43 series, aiming to enhance mechanical performance while minimizing production costs. Findings reveal that Mg–4Y-1Nd-2Gd-0.4Zr alloy exhibits superior mechanical performances after undergoing a solution treatment at 500 °C for 14 h followed by peak-ageing at 200 °C for 120 h. Specifically, the ultimate tensile strength of 342.1 ± 4.9 MPa for the peak-aged Mg–4Y-1Nd-2Gd-0.4Zr alloy exceeds those of Mg–Y series alloys previously reported. The contribution of grain boundary, solid solution and precipitation strengthening is calculated to be 26.2 %, 17.3 %, and 56.5 % of actual yield strength in the peak-aged Mg–4Y-1Nd-2Gd-0.4Zr alloy, respectively, indicating that the precipitates β′ have an ascertainable influence on the yield strength. During deformation the basal slips could be effectively arrested by the prismatic β′ precipitates, leading to the augmentation of mechanical performance.