In this paper, the microstructure evolution of as-cast and homogenized Mg-9Gd-4Y-2Zn-0.5Zr alloys during hot compression was studied by electron backscattered diffraction analysis. Specimens were compressed at 420 °C with reductions of 20, 40, and 70%. The results indicated that more recrystallized grains were obtained in the as-cast alloy, which was attributed to many block-shaped phase grains. Under the same conditions, the as-cast alloy had a finer microstructure and weaker texture. In the initial stage, dynamic recrystallization in the form of discontinuous dynamic recrystallization participated in deformation. Further deformation contributed to fine grains in the interior of deformed grains in the form of continuous dynamic recrystallization. Basal slip played an active part in the deformed grains, and the recrystallized grains activated pyramidal slip.