Magnesium alloys possess advantages such as low density, high specific strength, and good thermal conductivity, but their relatively low strength and ductility limit broader engineering applications. To enhance their overall performance, ZnO-coated graphene nanoplatelets (ZnO@GNPs) were introduced as reinforcements into a ZK60 magnesium alloy matrix. ZnO@GNPs/ZK60 composites containing 0 wt.%, 0.1 wt.%, 0.3 wt.%, 0.5 wt.%, and 0.7 wt.% ZnO@GNPs were fabricated via an ultrasonic-assisted mechanical stirring-casting method. The microstructure, mechanical properties, and thermal conductivity of the composites were examined via optical microscopy, scanning electron microscopy equipped with EDS, X-ray diffraction, microhardness testing, tensile testing, and laser flash analysis. The results show that appropriate additions of ZnO@GNPs are uniformly distributed within the magnesium matrix, effectively promoting grain refinement and improving interfacial bonding. When the ZnO@GNPs content reaches 0.7 wt.%, the ultimate tensile strength and elongation of the composite increase to 210 MPa and 5.3%, representing improvements of 19.3% and 39.5% over those of the base alloy, respectively. The hardness attains a peak value of 83.32 HV at 0.5 wt.% , whereas the highest thermal conductivity of 112.19 W/(m·K)is achieved at 0.3 wt.%, which is 13.7% higher than that of the ZK60 matrix. Overall, the enhancement in the mechanical and thermal properties is attributed to the combined effects of dispersion strengthening, grain refinement, improved interfacial bonding, and a reduction in the interfacial thermal resistance induced by the ZnO@GNPs.