The effects of the VR/VD ratio (the volume fraction ratio of recrystallized grains and coarse deformed grains) on the work hardening and softening behaviors of Mg–6Zn-1Gd-0.12Y alloy were studied in detail by detecting the variation of dislocation density. The alloys with different VR/VD ratios were successfully fabricated by rolling and subsequently different annealing processes. It was shown that the higher VR/VD ratio closely related to the nucleation and growth of recrystallized grains could be obtained by an increase in annealing temperature. An increase in the VR/VD ratio from 0.16 to 24 reduced the work hardening rate in stage Ⅲ, while increased the work hardening rate in stage Ⅳ, which was closely related to the initial dislocation density and dislocation evolution. Low VR/VD ratio in the alloy, with high initial dislocation density, was identified to be beneficial for improving the work hardening rate in stage Ⅲ. And an increased VR/VD ratio could promote dislocation multiplication by stimulating the yield phenomenon due to the lack of initial dislocation density, and improve the work hardening rate in stage Ⅳ. With the VR/VD ratio increased, the softening behavior of the alloys increased in stage Ⅲ, and first decreased and then increased in stage Ⅳ. This was because the alloy with the lower dislocation density was easy to deform due to few obstacles, which accelerated the softening in stage Ⅲ, and improved dislocation density after yielding provided the strong driving force for the softening in stage Ⅳ. Meanwhile, the cycle stress relaxation tests further manifested that the stress drop values (Δσp) of the alloys were in close contact with the initial dislocation density and dislocation evolution influenced by the VR/VD ratio. As a result, when the VR/VD ratio was 1.6, the Mg–6Zn-1Gd-0.12Y alloy had excellent strength and toughness match owing to a dynamic balance between the work hardening rate and softening rate.