The invention relates to a high strength heat-resistant 
magnesium alloy containing rare earths of the technical field of 
metallic materials and a preparation method thereof. The 
magnesium alloy comprises the following components according to the 
mass percent: Y with more than or equal to 3% and less than or equal to 16%, Gd with more than or equal to 0% and less than or equal to 10%, Ca with more than or equal to 0.3% and less than or equal to 5%, Zr with more than or equal to 0.1% and less than or equal to 1.5%, and one or a plurality of Nd, Si, Sb, Ti, Sn, Sr, Bi, Cd, Nd with more than or equal to 0% and less than or equal to 5%, Si with more than or equal to 0% and less than or equal to 5%, Sb with more than or equal to 0% and less than or equal to 5%, Ti with more than or equal to 0% and less than or equal to 5%, Sn with more than or equal to 0% and less than or equal to 5%, Sr with more than or equal to 0% and less than or equal to 5%, Bi with more than or equal to 0% and less than or equal to 5%, Cd with with more than or equal to 0% and less than or equal to 5%, and the rest is Mg and impurities. The 
magnesium alloy is obtained by using melting and the subsequent heat treatment. The 
magnesium alloy not only can serve as 
casting magnesium alloy but also can serve as the deformation 
magnesium alloy and has better predominant 
mechanical property compared with the WE series commercial magnesium alloy.