The strength–ductility trade-off dilemma is hard to be evaded in high-strength Mg alloys at sub-zero temperatures, especially in the Mg alloys containing a high volume fraction of precipitates. In this paper, we report an enhanced strength–ductility synergy at sub-zero temperatures in an aged Mg–7.37Gd–3.1Y–0.27Zr alloy. The tensile stress–strain curves at room temperature (RT), −70 °C and −196 °C show that the strength increases monotonically with decreasing temperature, but the elongation increases first from RT to −70 °C then declines from −70 °C to −196 °C. After systematic investigation of the microstructure evolutions at different deformation temperatures via synchrotron X-ray diffraction, electron backscattered diffraction (EBSD) and transmission electron microscopy (TEM), it is found that a high dislocation density with sufficient <c+a> dislocations promotes good tensile ductility at −70 °C, which is attributed to the minimized critical resolved shear stress (CRSS) ratio of non-basal <c+a> to basal <a> dislocations. In addition, more shearable precipitates can further improve the ductility via lengthening the mean free path of dislocation glide. The present work demonstrates that an excellent strength–ductility synergy at sub-zero temperatures can be achieved by introducing a high dislocation density and shearable precipitates in high-strength Mg alloys.