A systematic study was carried out to evaluate the effect of up to 2.5% yttrium additions on the properties of Mg-3%Nd alloy designated for high-temperature gravity casting applications. All the tested alloys were grain-refined by zirconium. The results show that additions of yttrium significantly improved the tensile yield strength, fatigue strength, and creep resistance while reducing the ductility. However, other properties such as the ultimate tensile strength and corrosion resistance in 5% NaCl solution were nearly not affected. The strengthening effect obtained by the yttrium additions is explained in terms of solid-solution strengthening and due to formation of a ternary phase of Mg-Nd-Y. The improved creep resistance was due to the large solubility of yttrium in solid-solution magnesium matrix and to the effective creep deformation barriers created by the ternary phase. The casting performance of the tested alloys in terms of fluidity was similar and no significant effect of the yttrium was evident.