Magnesium (Mg) and its alloys have broad application prospects in the fields such as biomedical materials and automobile manufacturing. A micro-alloyed Mg–2.0Nd–0.2Sr (wt.%) magnesium alloy is designed and obtained through semicontinuous casting. The evolution of microstructures and tensile properties are investigated with different heat treatments and extrusion treatments. The grain sizes decrease significantly after extrusion, thus changing the fracture mode during the tensile testing process. The ultimate tensile strength (UTS), yield strength (YS) and elongation (EL) of the properly processed extrusion alloy (referred to as MNS-E2) reach to 247 MPa, 228 MPa and 24%, respectively. The dramatical improvement of mechanical properties results from the refined grains and interactions between dislocations and precipitates. Some nanoparticle bands blocking the slippage and movement of dislocations are also found in the MNS-E2 alloy. The above causes combined result in an integrated effect of grain boundary strengthening, dislocation strengthening, precipitation strengthening and nanoparticle band strengthening. The contribution of strengthening mechanisms of MNS-E2 alloy consists of grain boundary with around 96 MPa, dislocations with around 3.4 MPa, precipitation strengthening with around 45 MPa and the nanoparticle band with around 18 MPa, respectively.