An additional hot compression process was applied to a dilute Mg-Mn-Zn alloy post-extrusion. The alloy was extruded at 150 °C with an extrusion ratio of 15:1 and subsequently hot-compressed at 180 °C with a true strain of 0.9 along the extrusion direction. The microstructure, mechanical properties and thermal conductivity of as-extruded and as-hot compressed Mg-Mn-Zn alloys were investigated using optical microscopy, scanning electron microscopy, electron backscattering diffraction, and transmission electron microscopy. The aim was to concurrently enhance both strength and thermal conductivity by fostering uniform and refined microstructures while mitigating basal texture intensity. Substantial improvements were observed in yield strength (YS), ultimate tensile strength (UTS), and elongation (EL), with increase of 77%, 53% and 10%, respectively. Additionally, thermal conductivity demonstrated a notable enhancement, rising from 111 to 125 W/(m·K). The underlying mechanism driving these improvements through the supplementary hot compression step was thoroughly elucidated. This study presents a promising pathway for the advancement of Mg alloys characterized by superior thermal and mechanical properties.