As an important manufacturing process for Mg-alloy components, high pressure die casting (HPDC) has attracted considerable attention. However, the application of magnesium alloy high pressure die castings is limited by variations in the mechanical properties, which can be ascribed to a heterogeneous distribution of microstructure. In this work, the through-thickness distribution of the microstructure features (i.e. grain size, β-phase and porosity) of HPDC AM60 alloy and their effects on the strain heterogeneity and the microhardness variation were carefully investigated. The results show that the HPDC AM60 alloy exhibited a gradient structured microstructure, i.e., two skin layers sandwiching a core layer. The skin was mainly comprised of fine grains (diameter ≤10 μm), whereas the core predominately consisted of externally solidified crystals (ESCs). Furthermore, the skin shows higher number and area fractions of β-Mg17Al12 particles. Heterogeneous through-thickness distribution of microhardness was observed in the as-cast sample, and the skin showed higher the microhardness than the core. β-Phase was the primary factor accounting for heterogeneous distribution of microhardness. In the as-cast sample, strain heterogeneity was measured at strain of 3% using digital image correlation (DIC) method. The strain in the skin regions was homogeneous, whereas significant strain heterogeneity was presented in the core. After T4 treatment, remarkable strain heterogeneity was still observed, indicating that β-phase did not have profound effect on deformation heterogeneity. Strain localized at the interdendritic regions of ESCs and the vicinity of grain boundaries in fine-grained regions, where porosity occurred. This illustrates that porosity was the primary factor inducing strain localization.