As-cast Mg97Y2Zn1 billets were processed with 4 passes of equal channel angular extrusion (ECAE) via different routes (A, Bc and C) at 350℃ to refine the microstructure. Mechanical properties were evaluated under both quasi-static and dynamic loading conditions. It is found that routes A and Bc are effective ways to produce a Mg alloy with nearly isotropic properties. For route C, the specimens were easy to fracture due to the pre-existing localized shear plane induced by ECAE. Microstructural observations revealed that the average grain size can reach to 1-2 μm. Uniaxial compressive loadings and micro-hardness measurements verified the enhancement of strength and it has been noticed that the increase of strength comes from the grain refinement in the Mg matrix. We also focused on the deformation mechanism of ultrafine-grained (UFG) Mg alloy with LPSO phases. It is believed that localized deformation should be responsible for the final failure of the UFG Mg97Y2Zn1 alloy under both quasi-static and high strain rate loading. The grain distribution after deformation indicates that the shear localization results from the rotation and rearrangement of grains. Moreover, cracks propagated along the grain boundaries to lead to the final failure.