The microstructure and mechanical properties of high-performance Mg-RE (Magnesium rare earth) alloys prepared through laser-directed energy deposition (LDED) are worthy of an in-depth study, due to their excellent application perspectives in the aviation industry. In this work, a nominal Mg-15Gd-1Al-0.4Zr wt% (GA151K) alloy was fabricated by LDED, and the solid phase transformation induced by the application of multiple thermal cycles was investigated in detail. Moreover, in the last deposited layer, fine α-Mg grains, particle-like secondary phases, and intergranular island-like phases were observed. In addition, in the second layer from the top, α-Mg grains grew slightly by 1.4 ± 1.0 µm and the fraction of the intergranular island-like phase was significantly decreased by 9.3 ± 2.1%. As the deposition process progressed, the pre-solidified layers experienced additional thermal cycles, and two solid phase transformations occurred. One of the recorded transformations was that of the intergranular phase from Mg 3 Gd to Mg 5 Gd, while the other one was the precipitation of β′-Mg 7 Gd within the α-Mg matrix from the supersaturated solid solution. Here, the thermal cycles acted as an incomplete solution and aging treatment, leading to the unique morphology of the as-built GA151K alloy. The microhardness was improved by 6.9 ± 5.0 HV 0.2 with the application of consecutive thermal cycles. This work established a simplified relationship between the process parameters, the microstructure, and the mechanical properties of LDED Mg-Gd alloys, which is expected to promote the development and application of LDED high-performance Mg-RE alloys. • The transformation of intergranular phase from Mg 3 Gd to Mg 5 Gd and precipitation of β′ in AM Mg-Gd alloys are firstly reported. • The microstructure evolution principle of LDED GA151K under the influence of thermal cycles is studied in detail. • The importance of in situ precipitation strengthening to AM Mg-RE alloy is proposed.