The homogenization annealing treatment has an important effect on the microstructure of Mg-Gd-Y-Zn-Zr alloys. In particular, the evolution of the LPSO structure plays an important role in the application of rare earth magnesium alloys. To study the effect of homogenization annealing on the microstructure evolution of the Mg-10Gd-4Y-1Zn-0.5Zr (mass fraction, %) alloy, the alloy was prepared by casting with vacuum argon protection in an electric-resistance furnace, followed by homogenization annealing. The microstructures of the as-cast and homogenized alloys were observed by OM, SEM and TEM. The results show that the as-cast alloy consists of a small amount of randomly dispersed island-like Mg 5.05 (Gd,Y,Zn) phase, coarse bulk Mg 10 (Gd,Y)Zn eutectic phase, Mg-RE particles and a large amount of coarse matrix α-Mg, with an average grain size of 91.2 μm. The α-Mg matrix, Mg 12 (Gd,Y)Zn eutectic phase and granular Mg-RE phase appear within the homogenized alloy, with an average grain size of 142.1 μm. The grains of the homogenized alloy grow significantly, and the coarse block Mg 5.05 (Gd , Y , Zn ) eutectic phase and 18R-LPSO structure at the grain boundary are transformed into the fine lamellar 14H-LPSO structure in the grains. The homogenized alloy contains more LPSO phase, of which the morphology evolves from coarse block to dense and fine lamellar and lacks high density dislocations and second phases compared with the as-cast alloy, indicating that the homogenization annealing process effectively promotes the softening of the alloy and plays an important role in the subsequent plastic processing.