The microstructure observation, tensile test, electrochemical measurement, and corrosion morphology characterization were conducted to study the effect of Gd on the microstructure, mechanical properties, and corrosion behavior of as-homogenized Mg-8Li-3Al-2Zn-0.2Zr (LAZ832-0.2Zr) alloy. The addition of trace Gd can improve the mechanical properties of as-homogenized LAZ832-0.2Zr alloy by refining the microstructure, reducing the content of AlLi softening phase, and forming Al₂Gd strengthening phase. Meanwhile, the addition of trace Gd can weaken the microgalvanic corrosion between matrix phase and AlLi phase, inhibit the galvanic corrosion between α-Mg phase and β-Li phase, and result in the formation of dense oxide film containing Gd₂O₃, thereby improving the corrosion resistance of the alloy. When the Gd content is 1.0 wt.%, the alloy shows the best comprehensive properties with the ultimate tensile strength of 189.8 MPa, elongation of 42.3%, and corrosion rate (determined by hydrogen evolution) of 0.86 mm·a^-1.