The effect of Gd content ranging from 6.5 wt.% to 8.5 wt.% on microstructure evolution and dynamic mechanical behavior of Mg-xGd-3Y-0.5Zr alloys was investigated by optical microscopy, X-ray diffraction, scanning electron microscopy and split Hopkinson pressure bar. The microstructure of as-cast Mg-xGd-3Y-0.5Zr alloys indicates that the addition of Gd can promote grain refinement in the casting. Due to the rapid cooling rate during solidification, a large amount of non-equilibrium eutectic phase Mg₂₄(Gd,Y)₅ appears at the grain boundary of as-cast Mg-xGd-3Y-0.5Zr alloys. After solution treatment at 520 °C for 6 h, the Mg₂₄(Gd,Y)₅ phase dissolves into the matrix, and the rare earth hydrides (REH) phase appears. The stress-strain curves validate that the solution-treated Mg-xGd-3Y-0.5Zr alloys with optimal Gd contents maintain excellent dynamic properties at different strain rates. It was concluded that the variation of Gd content and the agglomeration of residual REH particles and dynamically precipitated fine particles are key factors affecting dynamic mechanical properties of Mg-xGd-3Y-0.5Zr alloys.