Microstructure evolution and fracture behavior of Mg-9.5Gd-0.9Zn-0.5Zr alloy subjected to different heat treatments were systematically investigated using SEM and TEM as well as tensile testing. It was found that the microstructure of the as-cast alloy consisted of α-Mg matrix, net-like eutectic compounds (α-Mg + Mg ₃ (Gd, Zn)), cubic GdH ₂ phases and lamellar 14H LPSO phases. After solution treated at 515 °C for 24 h, two different cooling processes were used to elucidate the effect of cooling rates on the precipitation microstructure. With a hot water quenching, those secondary phases were completely dissolved. Instead, grey-like patches were observed within the α-Mg matrix, which were proposed to be rod-like Zn ₂Zr ₃ phases around the α-Zr particle. In contrast, with a furnace cooling, the formation of 14H LPSO and several cubic Mg ₃ (Gd, Zn) phases was observed. Furthermore, after hot water quenching, the subsequent ageing treatment parameters were also optimized to be 225 °C for 48 h. In the peak-aged condition, a denser and uniform distribution of basal precipitates γ″ and several basal precipitates γ′ together with Zn ₂Zr ₃ and ZnZr ₂ phases were observed. The samples after the solution treatment (for both hot water quenching and furnace cooling) showed a much higher ductility than the as-cast alloy, while the tensile yield strength (TYS) and ultimate tensile strength (UTS) remained unchanged. After the peak-ageing, a significant increase in the TYS and UTS but a great loss in ductility was observed. In the as-cast alloy, the initiation of microcracks occurred from the net-like eutectic compounds, which was believed to be one of the most important reasons for the tensile fracture, and showed a co-existence of intergranular and transgranular fracture behavior. After the solution treatment, with a hot water quenching, the fracture can be mainly related with failures along contraction twins, and then showed a transgranular fracture behavior. While, with a furnace cooling, due to the presence of the kinked 14H LPSO phases, the fracture was caused by the broken of 14H LPSO phases, and then lead to a transgranular fracture. The peak-aged alloy exhibited a brittle intergranular fracture, which can be related with failures along soft precipitation free zones (PFZs).