A combination of rare earth (RE) alloying and plastic deformation was employed to improve the comprehensive properties of Mg−3Al−1Sn−0.5Ca−0.2Mn (ATXM) alloys. The results show that the rolled ATXM-0.1RE alloys exhibit remarkable simultaneous improvements in both mechanical strength and corrosion resistance. Specifically, the alloys with Sm, Ce, and Y additions demonstrate yield strengths of 238, 232, and 238 MPa, elongations of 18%, 17%, and 23%, and corrosion rates of approximately 3.4, 2.9, and 1.7 mm/a, respectively. Notably, the rolled ATXM-0.1Y alloy displays the optimal overall properties. The underlying mechanisms involve grain refinement (from ~50 μm to below 5 μm) and alterations in composition, dimension, and arrangement of secondary phases, which contribute to fine-grain strengthening and Orowan strengthening, thereby bolstering mechanical properties. Furthermore, these modifications mitigate the galvanic corrosion and strengthen the protective corrosion product film, resulting in a significantly improved corrosion resistance.