In order to improve mechanical properties and formability of magnesium alloys, a range of new rare earth (RE) containing alloys was developed. However, the strengthening mechanisms of RE alloys are still unclear to a certain extent. In the present work numerous Mg-Gd and Mg-Gd-0.5Zr alloys were prepared. The effects of solute Gd atoms on hardness and yield stress were investigated with its contents in the range from 0.32 to 2.57 at. %. The hardness linearly increases with the increment of Gd content. The ultimate tensile strength and tensile yield strength increase obviously after adding Gd element. The maximum values of elongation were observed for MglOGd and Mg2GdZr alloys, respectively. After the extraction of grain size strengthening, the yield strength of Mg-Gd alloys increases linearly with cⁿ, where c is the Gd concentration and n=l/2 or 2/3.