For advancing the hydrogen economy, developing Mg-based alloys for hydrogen storage is an important choice, in which the introduction of long period stacking ordered (LPSO) phase cracked it wide open. Presently, various contents of LPSO phase are obtained in Mg96-xY2+xZn2 (x = 0, 1 and 2) alloys by adjusting Y/Zn ratio. The formation of eutectic (Mg + Mg3Y2Zn3) in Mg96Y2Zn2 alloy and Y(Mg) solid solution in Mg94Y4Zn2 alloy both lead to a greater degree of element segregation, while Mg95Y3Zn2 alloy with only α-Mg and LPSO phase achieves relatively the most uniform element distribution. Hydrogen storage tests show that Mg96-xY2+xZn2 alloys can be activated only after one de/hydrogenation cycle and LPSO phase undergoes irreversible hydrogen-introduced decomposition, in-situ generating YH2/YH3 phases. Mg95Y3Zn2 alloy achieves the fastest kinetics and the highest hydrogenation capacity, ascribing to the most uniformly dispersed YH2/YH3 nanoparticles, the finest α-Mg grains and the most significant lattice constants. Mg95Y3Zn2 hydride exhibits the fastest dehydrogenation rate and lowest decomposition temperature owing to the “hydrogen pump” effect of the most dispersed YH2/YH3 phase. Further tests reveal that Mg95Y3Zn2 alloy has a good cycling stability for hydrogen absorption.