Phase equilibria of the ternary Mg–Gd–Ag system focused on Mg-rich region at 400°C and 450°C are experimentally studied through evaluation of six selected compositions under the long annealed states. Analysis techniques, such as SEM/BSE, TEM and EPMA are employed for phase identification and chemical investigation. A previously unreported ternary compound, designated as X, is detected in the microstructures of all the samples. The crystal structure of this phase is determined as diamond-cubic structure with the lattice parameter of a=1.59±0.01nm. Extensive solubility of the Mg5Gd phase along the direction parallel to the Gd–Ag binary in the ternary field is observed. Based on the thermodynamic descriptions of the three constituent binaries and the ternary experimental data obtained in the present study, a thermodynamic description for the Mg–Gd–Ag system is developed by using CALPHAD technique. Reasonable agreement between the calculated and experimental results is achieved.