The Mg-Al-RE series heat-resistant magnesium alloys are applied in automotive engine and transmission system components due to their high-temperature performance. However, after serving at a high temperature for a long time, the Al11RE3 phase coarsened and even decomposed, while the Mg17Al12 phase grew and dissolved, which limits the service temperature of Mg-Al-RE series heat-resistant magnesium alloys to a maximum of 175 °C. In this study, a new preparation method for in situ AlN particles was presented. The AlN/Mg-4Al-4La-0.3Mn composites were prepared by a master alloy and casting method. The effects of various contents of AlN (0.5-3.0 wt.%) on the microstructure and mechanical properties of the Mg-4Al-4La-0.3Mn (AE44) alloy at room (25 °C) and high temperatures (150-250 °C) were investigated. Microstructure analysis revealed that the inclusion of AlN led to a reduction in both the grain size and second phase size in the AE44 alloy, while also improving the distribution of the second phase. The average grain size, Al11La3 phase, Al2La phase, and Al3La phase of the 2.0 wt.% AlN/AE44 composite were 135.7, 9.6, 1.9, and 12.6 μm, respectively, which were significantly lower than those of the AE44 matrix alloy (179.8, 12.6, 3.3, 17.8 μm). The refinement was attributed to the ability of AlN particles to serve as heterogeneous nucleation cores for α-Mg and, at the same time, impede the growth of the solid-liquid interface, eventually leading to grain refinement. With the increase in the AlN content, the mechanical properties of composites initially exhibited an increase at both room and high temperatures, followed by a subsequent decrease. When the AlN content was 2.0 wt.%, the composite exhibited optimal strength and plasticity matching. At room temperature, the TYS, UTS, and EL values of the 2.0 wt.% Mg-4Al-4La-0.3Mn composite were 96 MPa, 175 MPa, and 7.0%, respectively, which were increased by 26 MPa, 27 MPa, and 0.7% when compared with the base alloy. The TYS of the 2.0 wt.% Mg-4Al-4La-0.3Mn composite at 150 °C, 200 °C, and 250 °C were 17 MPa, 14 MPa, and 22 MPa higher than those of the matrix alloy, respectively. The main strengthening mechanisms were second phase strengthening, load transfer strengthening, and thermal mismatch strengthening. At elevated temperatures, AlN particles effectively pinned the grain boundaries, inhibiting their migration, and hindered dislocation climbing, resulting in excellent mechanical properties of the composites at high temperatures. This study contributes to the advancement of in situ AlN particle preparation methods and the exploration of effects of AlN on the properties and microstructure of Mg-Al-RE alloys at high temperatures (150-250 °C).