Alloying lithium with magnesium makes Mg-Li the lightest metal for potential structural applications. In this paper, Mg-9%Li-1% Zn alloy was successfully cast into a 37 mm thick ingot, followed by cold rolling to 2 mm thick. This remarkable cold work ability over other typical Mg alloys is due to appearance of ductile beta phase of BCC structure, even with the coexistence of brittle HCP alpha phase. A distinguished feature of this research is using apparatuses-XRD, SEM and TEM in identifying various kinds of phases. Three different thermo and mechanical treatments were conducted and the resulting microstructure was studied in order to understand the strengthening mechanism(s).