The oversaturated solutes in the alloy matrix, which are caused by nonequilibrium phase transformation during casting or T4 treatment, can precipitate in the subsequent annealing treatments or during service at high temperatures. Under deformation the precipitation could be enhanced in comparison to conventional isothermal ageing. The present work investigates the dynamic precipitation of oversaturated Mg-Sn alloys during creep. The influence of this dynamic precipitation on creep properties is discussed. It is found that the distribution of deformation-induced precipitates is inhomogeneous. These precipitates are first formed at grain boundaries and then at deformation bands which are kinetically and thermodynamically favourable. The dynamic precipitation accompanies the volume change of phases, which influences the subsequent formation and growth of voids. Consequently, the creep behaviour also changes due to different precipitation under deformation.