The　microstructure　evolution　of　the　Mg-4.5Zn-0.75Er　alloy　containing　quasicrystalline　phase　(I-phase)　during　heat　treatment　and　hot　compression　was　investigated　by　means　of　optical　microscopy　(OM),　scanning　electron　microscopy　(SEM),　X-ray　diffraction　(XRD)　and　transmission　electron　microscopy　(TEM).　It　was　found　that　the　as-cast　alloys　mainly　consisted　of　α-Mg　matrix　and　I-phase.　The　I-phase　with　different　morphologies　could　be　found　at　both　matrix　and　interdentritic　boundaries.　The　I-phase　almost　dissolved　into　the　matrix　at　460oC,　meanwhile,　some　magnesium-rare　earth　phase　(Mg-Er　phase)　was　precipitated　and　the　volume　fraction　increased　with　prolonging　the　solid　solution　time.　The　true　stress-strain　curve　obtained　from　the　hot　compression　test　showed　the　flow　stress　first　increased　to　a　maximum　and　then　decreased　to　a　steady　state.　It　indicated　that　the　dynamic　competition　took　place　between　the　working　hardening　and　working　softening　during　hot　compression.　Moreover,　the　main　deformation　mechanism　was　twining　at　strain　of　0.08　for　the　as-solution　alloy;　with　the　increase　of　the　strain,　dynamic　recrystallization　(DRX)　grains　appeared　at　original　grains　and　twins　boundaries.　Lots　of　nano-scale　I-phase　which　pined　and　hindered　dislocation　precipitated　within　the　matrix　during　hot　compression　process.　©　2017　Trans　Tech　Publications,　Switzerland.