The addition of various elements to magnesium alloys has expanded their applications but has resulted in numerous defects. This study delves into the formation mechanism of microstructure defects in Mg-3.5Y-0.9Ca-0.6Zr alloys and their impacts on mechanical properties, aiming to optimize alloy performance. A systematic study on the microstructure and properties of the as-cast and as-rolled alloys was carried out through the preparation of alloys by melting and rolling and comprehensive methods such as metallographic structure observation, room-temperature tensile mechanical property testing, energy dispersive spectroscopy composition analysis, and scanning electron microscopy micromorphology characterization. The results indicate that segregation and holes are the main defects, with segregation being the key defect. This phenomenon causes nonuniformity in the grains and performance degradation. The as-cast alloy has a tensile strength of 154 MPa, yield strength of 83 MPa, and elongation of 5.1%. Rolling reduces defects and enhances performance, and the as-rolled alloy exhibits a tensile strength of 276 MPa, yield strength of 105 MPa, and elongation of 7.1%.