The effects of trace Ag element on the precipitation behaviors and mechanical properties of the Mg-7.5Gd- 1.5Y-0.4Zr (wt.%) alloy by means of tensile test, X-ray diffractometry, scanning electron microscopy, electron backscattered diffractometry, and scanning transmission electron microscopy. There is an unusual texture (á0001？//extrusion direction) in the extruded Mg-Gd-Y-Zr alloys containing 0.5 wt.% Ag. During the aging periods at 225 °C, the addition of the trace Ag does not form new precipitates, just accelerates aging kinetics, and refines β′ precipitates, thereby increasing the number density of the β′ precipitates by Ag-clusters. Moreover, the Mg-Gd-Y-Zr alloy containing 0.5 wt.% Ag shows the most excellent synergy of strength and plasticity (408 MPa of ultimate tensile strength, 265 MPa of yield strength, and 12.9% of elongation to failure) after peak-aging.