Age-hardenability and corresponding improvement of the mechanical properties of Mg-1Al-0.7Ca and Mg-1Al-0.7Ca-0.7Y alloy sheets are addressed with respect to the microstructure and texture evolution during thermomechanical treatments. A fine grain structure and weak texture with the basal pole split into the sheet transverse direction are retained in the Mg-1Al-0.7Ca-0.7Y sheet even after the homogenization at 500 °C, due to the grain boundary pinning by Y-containing precipitates possessing a high thermal stability. Contrarily, the Mg-1Al-0.7Ca sheet shows a coarse microstructure and basal-type texture after the homogenization. The peak-aged condition is attained after the aging at 250 °C for 1800 s of both homogenized sheets, while the Y-containing sheet shows a higher hardness than the Mg-1Al-0.7Ca sheet. TEM analysis and thermodynamic calculation show the formation of metastable precipitates composed of Al, Ca, Y and Mg in the Mg-1Al-0.7Ca-0.7Y sheet at the homogenized and peak-aged conditions. A significant increase in the yield strength is obtained in the peak-aged condition from 162 MPa after the homogenization to 244 MPa, which arises from the increased size and number density of the precipitates. The high age-hardenability of the Mg-1Al-0.7Ca-0.7Y sheet attributes to the superior mechanical properties with an improved ductility promoted by the weak texture.