<p>The effect of variable channel angular extrusion (VCAE) deformation temperature on the microstructural evolution and mechanical properties of the Mg-8.5Li-6.5Zn-1.3Y alloy was investigated. The second phases and grains of the alloy in the VCAE condition were found to be significantly refined. I, W and MgY phases acted as heterogeneous nucleation sites and promoted the refinement of DRX grains. The volume fraction of the fine grain region increased at first and then decreased with increasing VCAE extrusion temperature. The grain size of <i>β</i>-Li phase, in which the nanoscale MgLiZn phase maintained a good eutectic relationship with the matrix, increased with a decrease in the volume fraction of the fine grain region. The <i>β</i>-Li phase grain refinement mechanism was governed by the discontinuous dynamic recrystallization. At 275°C VCAE extrusion temperature, dislocations accumulated at the grain boundaries, <i>α</i>-Mg phase transformed into the nanoscale sub-grain, and the ultimate tensile strength of the alloy reached a maximum of 288.93 MPa.</p>