Abstract In this study, firstly, dynamic microstructural changes of an as-cast Mg–5.0 Zn–0.9 Y–0.16 Zr (wt.%) alloy (designated ZWK510) during hot extrusion at 350 °C and a ram speed of 3.33 mm s −1 was systematically investigated by electron backscattering diffraction (EBSD) analysis. The dynamic recrystallization (DRX) mechanism during hot extrusion was discussed. Then, the effect of microstructure and texture on the mechanical properties of the as-extruded alloy specimens at room temperature was discussed. The as-cast ZWK510 alloy consists of a-Mg and quasicrystalline I-phase. During hot extrusion at 350 °C, the main DRX mechanism is the continuous DRX near the original grain boundaries. The I-phase can accelerate the DRX behavior near these areas by obstructing the slip of dislocations. The deformation twins and massive blocky substructures formed in original grains can coordinate the DRX process near the original grain boundaries, however the DRX seldom occurs inside of these area. After further deformation, these deformation twins and massive blocky substructures are elongated along the material flow and become so-called unDRXed area, then a bimodal “necklace structure” composed of fine DRXed grains of about 2.1 μm and unrecrystallized coarse area is formed. The extruded ZWK510 alloy shows a DRX ratio of about 58% and a typical basal fiber texture of ( 0 0 0 1 ) 1 0 1 ¯ 0 matrix / / extrusion direction (ED). In the DRXed area around the crushed eutectic I-phase a large number of fine I-phase precipitates are observed pinning at the newly formed DRXed grain boundaries. The 0.2% proof strength and the ultimate tensile strength of the extruded ZWK510 alloy specimen are 317 and 363 MPa, respectively, with an elongation to failure of 12%, which have been attributed to strong basal fiber texture, refined grain size as well as the existence of fine precipitates formed during the hot extrusion.