In recent years, modification of texture distribution has been considered a valid approach to improve the room-temperature (RT) formability of magnesium (Mg) alloys. In this study, a novel Mg2Zn3Li1Gd alloy sheet with weak elliptical-texture was fabricated by cold rolling and subsequent annealing, and it showed an excellent Erichsen (IE) value near 7.1 mm. Both quasi-in-situ electron backscatter diffraction (EBSD) and transmission electron microscopy (TEM) analysis indicate that considerable basal and pyramidal dislocations can be activated in the cold rolling process. During annealing, these dislocations can induce nucleation and then cause preferential misorientation relationships around 〈uvt0〉 concerning the nuclei and parent grains, which can facilitate the formation of elliptical texture. Furthermore, the particle-stimulated nucleation (PSN) mechanism and the co-segregation of Zn and Gd at grain boundaries (GB) further weak texture intensity. Finally, the mechanical properties of the Mg2Zn3Li1Gd alloy sheet are significantly improved.