The microstructure and mechanical properties of extruded Mg-alloy of Mg-1Al-0.4Ca-0.5Mn-0.2Zn (mass fraction, %) were systematically investigated. As indicated by the results, the incomplete dynamic recrystallization occurred for the alloys extruded at 260℃ (denoted as AXMZ1000-260) and 290°C (AXMZ1000-290) with recrystallized grain sizes of 0.75 μm and 1.2 μm, respectively. The two alloys have high-density G.P. regions and spherical nano-phases, which can effectively inhibit the dislocation motion and provide abundant nucleation sites for dynamic recrystallization. Moreover, the nano-phases precipitated along grain boundaries can restrain the migration of grain boundary and restrict the growth of DRXed grains, which results in the ultrafine grains with a size of 0.75 μm in AXMZ1000-260 alloy. The strength of the alloy decreases with the increase of extrusion temperature, and the change of elongation is not obvious. The yield strength and elongation of alloys extruded at 260℃ and 290℃ are approximately 322 MPa and 343 MPa, as well as 13.4% and 13%, respectively. The dynamic precipitation and recovery process are promoted by the increasing extrusion temperature, and a high-density G.P. zones and spherical nano-phases are accumulated in the alloy. At the same time, many dislocations are transformed into LAGBs by dynamic recovery, and the unDRXed areas are subdivided into dense lamellar subgrains. The nano-phases and LAGBs can effectively hinder the newly generated dislocation motion, which is the major reason that the alloy extruded at 290℃ still have a high yield strength and the change of ductility is not obvious. Furthermore, TEM observations show that the pinning effect of G.P. zones can impede the dynamic recovery to certain extent, resulting in a high number of residual dislocations in the alloy, which is conducive to the improvement of the yield strength.