The　as-extruded　(EX)　Mg-Gd-Y　alloy　studied　here　exhibited　a　bimodal　structure,　composed　of　fine　dynamic　recrystallized　(DRXed)　grains　with　random　orientations　and　longitudinal　coarse　hot-worked　grains.　The　slip　analysis　showed　the　DRXed　grains　exhibited　mainly　basal　slips,　while　the　hot-worked　grains　exhibited　mainly　prismatic　slips　during　the　tensile　deformation.　The　distribution　of　geometrically　necessary　dislocations　(GNDs)　showed　that　there　was　strain　partitioning　between　the　fine　and　coarse　grain　regions.　The　hetero-deformation　induced　(HDI)　hardening　occurred　between　the　two　domains.　It　improves　the　strength　and　strain　hardening　capability　of　the　alloy,　leading　to　good　strength-ductility　synergy.　Microcracks　tended　to　nucleate　at　the　DRXed　grain　boundaries,　as　well　as　at　the　interface　between　the　two　domains.　The　calculation　of　geometric　compatibility　parameter　(m＇)　indicated　that　strain　incompatibility　between　the　adjacent　grains　induced　the　crack　nucleation.　The　toughening　effect　of　the　fine　DRXed　grains　hindered　the　crack　propagation.　However,　the　major　crack　formed　at　the　interface　between　the　two　domains　propagated　unstably,　due　to　the　high　stress　concentration　and　the　large　crack　size,　causing　the　final　failure.