A novel low-alloyed Mg-Bi-Y-Zn alloy system was developed and extruded successfully at 673 K. The corrosion behavior and tensile properties of the extruded alloy were investigated through scanning electron microscopy (SEM), electron backscatter diffraction (EBSD), electrochemical tests and tensile test. The extruded alloy exhibits a nearly fully recrystallized grain structure with a scattered extrusion fiber texture and some sub-micron precipitates. In SBF solution, the dominated corrosion mode changed from galvanic induced pitting corrosion at initial stage to filiform-like corrosion and finally mixed pitting corrosion and local fall-off of grains during long-term corrosion processes. The tensile properties and corrosion resistance of the extruded Mg-0.5Bi-0.5Y-0.2Zn (wt.%) alloy are: tensile yield strength of 237 MPa, ultimate tensile strength of 304 MPa, elongation to failure of 31% and mean corrosion rate of 0.14 mm/a. The great balance between tensile properties and corrosion resistance is mainly attributed to the homogeneous grain structure and the presence of sub-micron scaled precipitates, indicating a promising potential in the application in biomedical field.