In this work, a micron-sized Mg85Ni5Y10 amorphous alloy was successfully prepared by using melt-spinning technology, and the thermodynamic stability and nonisothermal crystallization kinetics were studied in detail. The activation energies Eg, Ex, and Ep corresponding to the glass transition temperature (Tg), onset crystallization temperature (Tx), and peak crystallization temperature (Tp), respectively, were calculated by using the Kissinger and Ozawa equations, among which the value of Eg was determined to be the highest, indicating that atom rearrangement has difficulty overcoming the interaction force between Ni and Y atoms in view of the low mixing enthalpy. Additionally, in situ XRD was used to analyze the phase transformation during crystallization, showing that phase separation occurs prior to the precipitation of the Mg2Ni nanocrystalline phase, which is followed by the appearance of Ni3Y and Ni2Y3. The first and second crystallization processes involve diffusion-controlled growth with different nucleation rates, while in the final stage, the crystal continues to grow without obvious nucleation. The results may shed some light on interpreting the crystallization mechanisms of amorphous Mg-Ni-Y and even other Mg-Ni-RE alloy.