<p>Magnesium (Mg) alloys offer lightweight structural solutions, but their hexagonal close-packed (HCP) structure limits ductility at room temperature. Alloying with Zn (Zinc), rare-earth (RE) elements, and Zr (Zirconium), along with hot extrusion, enhances microstructure and mechanical properties. This study produced Mg-3Zn-3RE-xZr (<i>x</i> = 0, 0.3, 0.6, 1.0&#xa0;wt.%) alloys by casting and hot extrusion at 380&#xa0;°C with a 12:1 ratio. Microstructure, phase constitution, hardness, and tensile properties were evaluated in both as-cast and extruded states. Increasing Zr content refined as-cast grains and reduced the continuity of RE-rich interdendritic phases. After extrusion, all alloys showed a fully recrystallized, equiaxed microstructure with smaller, more uniform grains. X-ray diffraction and EDS analyses confirmed an <i>α</i>-Mg matrix with RE-rich Mg₁₂RE/Mg₁₂REZn-type intermetallics, which became fragmented and evenly dispersed after extrusion. Vickers hardness increased from 75-79 (as-cast) to 77-84&#xa0;HV (extruded), indicating grain refinement and dispersion strengthening. A strength–ductility trade-off was observed: 1&#xa0;wt.% Zr yielded the highest tensile strength, while 0.6&#xa0;wt.% Zr provided maximum elongation. Unlike previous studies that focused on single-RE systems or a single Zr level, this work systematically examines Zr content (0-1&#xa0;wt.%) in a light-RE mischmetal Mg-3Zn-3RE alloy under consistent processing conditions. The findings clarify how Zr addition and hot extrusion influence dynamic recrystallization, intermetallic dispersion, and mechanical performance, offering guidance for optimizing Mg alloys for strength or ductility.</p> Graphical Abstract <p></p>