It has recently been found that Mg97Zn1Y2 extruded alloy containing a long-period stacking ordered (LPSO) phase has superior mechanical properties. In this study, the high-temperature deformation mechanism of the Mg97Zn1Y2 extruded alloy was examined. Grain-boundary strengthening due to the refined Mg-matrix phase and fiber-like reinforcement due to the LPSO phase dominantly contribute to the strengthening of the alloy at room temperature, and they were confirmed to effectively act even at 200°C. As a result, the extremely high strength of the alloy is maintained up to 200°C, unlike other conventional Mg alloys. At 300°C, however, the yield stress of the Mg97Zn1Y2 alloy largely decreases, and the orientation and the grain size dependence of the yield stress become weak. Increases in the operation frequency of non-basal slip in the Mg-matrix grains weaken the grain-boundary strengthening effect. In addition, the effect of fiber-like reinforcement due to the LPSO phase is also weakened at 300°C because the window of microstructure suitable for inducing this effect becomes significantly narrow at this temperature.