Early stages of precipitation in a Mg–Y–Nd based alloy aged at 150 °C have been studied using TEM and small angle X-ray scattering (SAXS). The former brings information concerning nature, morphology and size of precipitates, and the latter adds qualitative and quantitative information concerning populations of precipitates in terms of size and volume fraction. Precipitation at 150 °C involves formation of DO19 monoplanar precipitates, which further develop into the β″ and β′ phases having platelet and globular morphologies, respectively. TEM observations on samples aged at 150 °C reveal the formation mechanism of the bco-β′ structure by the ordering of monoplanar DO19-β″ precipitates. Additional examinations at 250 °C revealed the DO19-β″→bco-β′ transformation, as well as β1 precipitates. Estimation of the volume fraction deduced from SAXS is discussed on the basis of the TEM results.