The microstructure and room temperature tensile properties of Mg–12Gd–3Y–2Zn–0.5Zr (wt%) alloy processed by repetitive upsetting and extrusion (RUE) at decreasing temperature condition were investigated. The RUE was carried out up to cumulative strains of around 5.4 with decreasing temperature from 753 to 683 K pass-by-pass. With increasing RUE passes, average grain size was gradually decreased from 58 to 7.3 µm and microstructure became more homogeneous. Block-shaped long period stacking ordered (LPSO) phases at grain boundary were broken into small blocks or rods. Lamellar LPSO structures dissolved gradually and β-Mg₅(Gd,Y) phase particles precipitated at grain boundaries. Both strength and ductility were improved simultaneously with increasing RUE passes. After 4 RUE passes, the ultimate tensile strength, yield strength and elongation to failure of the alloy reached to 351 MPa, 262 MPa and 10.3%, respectively. The significant improvement of mechanical properties could be ascribed to grain refinement, dispersion of β-Mg₅(Gd,Y) phase particles and redistribution of fragmented block-shaped LPSO phases.