An Mg - 12Gd - 3Y (wt%) alloy was prepared by conventional casting method using permanent steel mold. Then this alloy was subjected to hot processing, involving hot extrusion and free forging. Tensile strength at room temperature can be improved, with the highest ultimate tensile strength (UTS) value of 390.2 MPa achieved by hot extrusion in comparison to that of as-cast alloy. Temperature dependence of tensile strength is distinguishable for the as-extruded alloy, while the relative stability in UTS values of the alloy after being freely forged should be ascribed to the inter-crossing among deformation bands located at various orientations and the accommodation effect of twining lamellas resulting from forging process on plastic deformation during tensile test at elevated temperatures. Further annealing after hot processing can only have adequate influence on the tensile strength of as-forged alloy. For the alloy freely forged and annealed at 523 K for 4 h, the highest UTS (441.1 MPa) at room temperature is found, which should be mainly related to an evolution from the original as-forged microstructure with subgrains to a more stable combination of large and refined grains through dynamic recrystallization during free forging, and the stress at offset yield YS (384.3 MPa) is also comparable to that relatively high value of 396.9 MPa after solution treatment and isothermal aging of the as-cast alloy.