Although the precipitation and recrystallization of Mg–Al–Ca–Mn based alloys have been well investigated individually, there is still a lack of a detailed investigation on the effect of the Al-rich clusters, Mn-rich precipitates and/or Ca-rich Laves phases formed from dynamic precipitation during rolling on the grain size and texture as well as yield strength. Here, we have investigated the effect of Mn (1 wt. %) on the dynamic precipitation and yield strength of rolled Mg–3Al–1Ca alloy after rolling up to 1 and 6 passes (at 350 °C and 300 °C). It was found that an effective grain refinement can be obtained due to the fact that the dynamic precipitation enhances dynamic recrystallization by particle stimulated nucleation (PSN) mechanism. No significant texture change was obtained although the dynamic precipitation of Mn-rich particles due to the addition of 1 wt. % Mn results in a change from an RD-split texture to a strong basal texture. Three different Mn-rich phases ((i) large primary Al8Mn5 phase, (ii) the long plated-shaped Al8Mn5 phase, and (iii) nanoscale Al8Mn5 phase), C15 Laves phase (Al2Ca) and Al-rich clusters (G.P. zone), were observed, while no plate-shaped Al–Ca precipitate was observed on the basal plane of α-Mg matrix, indicating a competition among the formation of Al-rich clusters, plate-like Al–Ca precipitates, Ca-rich Laves phase, and Mn–rich phase within α-Mg matrix. Dispersion strengthening by the Ca-rich Laves phase, Mn–rich phase and Al-rich clusters is proposed to be attributed to the significant improvement of yield strength. This investigation highlights the importance of elucidating the effect of the dynamic precipitation on yield strength of rolled Mg–3Al–1Ca–1Mn alloys and provides helpful hints to further optimize the deformation and mechanical properties of Mg–Al–Ca–Mn based alloys.