Long-period stacking-ordered (LPSO) structures formed in both the α-Mg component and the interdendritic component in as-cast Mg-4.5Zn–6Y-0.5Zr (wt.%) alloy were studied from micro to atomic scales. Inside the α-Mg component, stacking-ordered structure took three forms: single unit, scattered cluster, and a single layer of short range 18R structures. Chemical ordering of clusters of Zn and Y formed in the short range scale but not in the long range. Inside the interdendritic component LPSO-layered structure took two forms: 18R and 14H LPSO. Long-range 18R formed at locations with high concentrations of Zn and Y. 14H LPSO phase formed at the edge of any layer of 18R LPSO phase, sandwiched between 18R and α-Mg band. We concluded that the formation of LPSO had occurred in two distinct steps. First, Zn and Y atoms were segregated into two adjacent atomic layers of the original hexagonal close-packed matrix. Then, the nucleation of stacking fault occurred, followed by the growth of a stacking fault, which attracted more Zn and Y atoms into four constitutive close-packed layers, forming a new segment of an LPSO structural unit.