The application of Mg alloys is limited by their relatively low absolute strength. Therefore, this study aims to enhance the mechanical properties by controlling the morphology and distribution of precipitates. Using advanced characterization techniques, including scanning electron microscopy and transmission electron microscopy, the results reveal that the accumulation of Ag and dislocations during radial compression synergistically promotes the formation of dynamic precipitated β-Mg5(Gd, Ag) phase in the Mg-Gd-Y-Zr alloy containing Ag. This leads to a reduction in the volume fraction of β′ precipitates (17.9 %) and weakens the aging strengthening during subsequent peak aging. In contrast, no dynamic precipitates form in the Mg-Gd-Y-Zr alloy without Ag, and dislocations introduced by radial compression facilitate the formation of β′ precipitates in chain-like structures, which contributes to the strength improvement. Thus, this work provides new insights into improving the mechanical properties of Mg alloys by regulating the distribution of dynamic precipitates and aging phase.