A novel Mg-5Sn-2Al-1Zn (TAZ521) alloy was prepared. Direct extrusion (DE) and extrusion-shearing (ES) processes were performed on the alloy to improve its strength and ductility. The microstructure evolution, texture evolution, and strengthening mechanisms of as-homogenized and as-extruded alloy were investigated by XRD, SEM, TEM, EBSD, and tensile tests. The results showed that the mechanical properties of the DE-processed alloy were improved. However, the alloy exhibited a bimodal microstructure consisting of coarse grains and fine DRXed grains. After the ES process, the microstructure became more uniform and a good combination of strength and ductility was achieved. The TYS, UTS, and EL were 212 MPa, 303 MPa, and 21.7%, respectively. Grain refinement and pinning effect by Mg₂Sn precipitates play an important role in the enhancement of strength. Additionally, the improvement of ductility is attributed to the weak basal fiber texture and the activation of non-basal slip.