A novel Mg-Nd-Sm-Zn-Zr alloy with promising age-strengthening effects has been successfully developed to meet the urgent needs of lightweight in the aerospace industry. The precipitation behavior and elastic properties of the nano-precipitates in the alloy have been revealed using transmission electron microscopy and first-principles calculation. The Guinier-Preston (GP) zones, lamellar γ′ precipitates, and granular β′ precipitates formed in the α-Mg matrix after aging at 190 °C for 3 h (under-aging stage). Notably, the alloy reached the peak-aging stage and achieved an excellent ultimate tensile strength of 266 MPa after aging for 18 h. These precipitates further transformed into the lamellar β′ and β1 precipitates, and the enclosed nano-strengthening structure was constructed by γ′, β′ and β1 precipitates. The precipitation sequence of the aged alloy was determined as the supersaturated solid solution (SSSS) → GP zones → β′/γ′ → β1. First-principles calculations and 3D visualization approach demonstrated that the addition of mixed light RE elements can effectively improve the elastic modulus and reduce the elastic anisotropy of β′ nano-precipitates. The Young's modulus (E), shear modulus (G), and anisotropy index (AU) of β′-Mg7(Nd,Sm) precipitates were 48.38 MPa, 18.79 MPa and 2.29, respectively. This study provides a theoretical and experimental basis for further research and development of novel high-performance Mg-light RE alloys.