• A new hexagonal phase AlZnY was identified in the Mg-4Y-Al-3Zn alloy and reported for the first time. • The atomic structural model of the AlZnY phase was constructed and its plausibility was discussed. • The deformation behavior of AlZnY phase has been evaluated and compared with that of the α-Mg matrix. The composition of the phases in the Mg–Y–Al–Zn system is still ambiguous mainly because the elemental compositions of these phases are tested without studying the corresponding crystal structures. In the present work, a new hexagonal phase AlZnY ( a = b = 8.9443 Å, c = 7.2111 Å, and α = β = 90° γ = 120°) was observed in the Mg–4Y–Al–3Zn alloy for the first time. The deformation behavior of the AlZnY phase was evaluated, the results show that it is a brittle phase with a hardness of 2.04–2.21 GPa. This study provides new data for the knowledge base of the Mg–Y–Al–Zn alloy system.