Abstract: To study the coarsening process of the β' phases and the formation and evolution mechanisms of the associated precipitation structures in Mg₉₇Gd₂Y₁ alloy, the precipitation structures formed in different aging stages were characterized by using atomic scaled high angle annular dark field scanning transmission electron microscope (HAADF-STEM) imaging technique and their stabilities with the aid of first principle calculation method were analyzed. Results show that the relevant β'_F, β_M and β″ precipitates are formed mainly in the early stage of the β' phases coarsening process. Their formation is closely related to existence of the high internal mismatch strain field around the interface of β' phases. With the progress of coarsening process for the β' phases, the β_M and β″ precipitates are gradually reduced in both sizes and amounts and instead the bamboo-like precipitates composed of β' and β'_F precipitates increase. When the mismatch strain is large enough, some dislocations will occur in the β'_F precipitates, at which the β phases can nucleate and then gradually grow up as major equilibrium precipitates.