Machined chips of Mg-Zn-Y-Zr alloy were consolidated by cold pressing and then hot extrusion under various processing temperatures and extrusion ratios. The results show that the microstructure of the chip-extruded alloy is marked by a large number of recrystallized grains and some unrecrystallized grains, which results in high strength but low ductility at temperatures below 320 ℃. With increasing processing temperature up to 360 ℃, entirely recrystallized and equiaxed grains are obtained. Mg-Zn-Y-Zr alloy with low strength but high ductility is obtained compared with the alloy processed at low temperature. At 420℃, coarse and equiaxed grains are formed, which results in the drastic decrease of mechanical properties. With increasing extrusion ratio from 8 to 16, the grain refinement is more obvious and the mechanical properties at room temperature are improved effectively. However, the yield strength and ultimate tensile strength are improved a little with further increasing extrusion ratio.