<p>A novel method was developed to prepare Y-containing magnesium alloy by adding Ca to pure magnesium melt to reduce YF₃ in one step. Based on thermodynamic theoretical calculation of binary melt, feasibility of using Ca to reduce YF₃ in Mg–Ca alloy melt was proved. Effects of temperature, Ca, YF₃ content and time on Y yield, microstructure and phase composition were investigated. Reduction kinetics model of YF₃ in Mg–Ca melt was established and its mechanism was revealed. The results showed that YF₃ can be reduced by Ca, and Gibbs free energy decreases with increase of Ca content. Increasing the reduction temperature, Ca, YF₃ content and reduction time can effectively improve the Y yield. Y-containing magnesium alloys were mainly composed of <i>α</i>-Mg and Mg₂(Ca, Y) phases, but Y did not form intermetallic compounds with Mg alone, but was solid dissolved in <i>α</i>-Mg or instead of Ca in Mg₂Ca. Ca–YF₃ reduction reaction was a solid-liquid reaction, which was mainly controlled by the internal diffusion mechanism of shrinking core model, and the apparent activation energy was 108.02&#xa0;kJ/mol. This work provided a new design strategy for the preparation of Y-containing magnesium alloys with high efficiency, low carbon and low cost.</p>