The Mg-Al-Gd ternary system was re-assessed by the CALPHAD (CALculation of PHAse Diagrams) method and a set of self-consistent thermodynamic parameters of the system were obtained. The long-period stacking ordered (LPSO) phases, 14H and 18R, were described by thermodynamic model of Mg_x(TM,Mg)₆(RE,Mg)₈ (TM=Transition Metal, RE=Rare Earth). Representative isothermal sections, vertical sections, liquidus projections and the related invariant reactions were calculated and compared with the experimental data, showing the reliability of the obtained thermodynamic parameters. Reaction scheme for the whole ternary system was also presented. The Scheil solidification paths and the phase fractions of several Mg-Al-Gd alloys were calculated and analyzed. The phase formation during solidification and the phase content of γ and LPSO phases are clearly described with the increase of Gd content, which is crucial to the microhardness, ultimate tensile strength and yield strength of Mg-Al-Gd casting alloys.