High Gd content Mg alloys are expected to overcome the poor heat resistance of magnesium (Mg) alloys. However, the low ductility limits their applications. Nano-precipitates is a viable method to enhance the strength without seriously plummeting ductility. In this study, ultrafine and densely arranged dislocation cells, with an average size of 27 nm, were obtained in Mg-11.5Gd-2Y-0.5Zr-0.5Ag-0.5Nd alloy after hot rolling. During the aging process, the dislocation cells facilitated the precipitation of fine and high-density β'. In the peak-aged (225 °C, 15 h) alloy, the volume fraction of β′ could reach 20.3 %, and the average length and thickness of β′ are 10 and 5.9 nm, respectively. The alloy with such a microstructure exhibited a yield strength (YS) of 403 MPa, and an EL of 8.3 % at room temperature. YS of the alloy was still 357 MPa, 310 MPa, and 206 MPa at 200 °C, 250 °C, and 300 °C, respectively. The high YS is attributed to grain boundary, dislocation, solid solution, and precipitation strengthening, among which precipitation strengthening is dominant. Moreover, the nano-β′ could be sheared, thereby coordinating the plastic deformation. Therefore, the present alloy achieved high YS while maintaining good ductility.