Mg alloys with fine mechanical properties and high damping capacities are essential in engineering applications. In this work, Mg–Zn–Y based alloys with lamellar long period stacking ordered (LPSO) phases were obtained by different processes. The results show that a more lamellar second phase can be obtained in the samples with more solid solution atoms. The density of the lamellar LPSO phase has an obvious effect on the damping of the magnesium alloy. The compact LPSO phase is not conducive to dislocation damping, but sparse lamellar phases can improve the damping capacity without significantly reducing the mechanical properties. The Mg95.3Zn2Y2.7 alloy with lamellar LPSO phases and ~100 μm grain size exhibited a fine damping property of 0.110 at ε = 10–3.