The mechanical properties at high temperatures of two Mg-Ni-Y-RE alloys prepared by conventional or powder metallurgy routes have been evaluated. All alloys exhibit high-strength up to 250°C but their strength depends more on the composition of the alloy rather than on the processing route. High strength of the alloys arises from their fine grain size but there is an additional contribution of load transfer from the magnesium matrix towards the second phases in the alloys processed by the conventional route while additional hardening in the alloys prepared by powder metallurgy is due to Orowan mechanism. Above 250°C, the strength drops to very low values but all alloys exhibit high elongations and grain boundary sliding is the controlling mechanism. Grain boundary sliding also induces cracking of the coarse second phases into smaller pieces during the initial stages of plastic deformation of conventionally processed alloys.