This paper presents the successful preparation of a high-damping, high-strength Mg–Cu–Mn–Zn–Y alloy by alloying and extrusion. The damping capacity of the as-cast Mg–3Cu–1Mn alloy (alloy 1) displayed evident variations with changes in Y and Zn content. The as-cast Mg–3Cu–1Mn–2Zn–1Y alloy (alloy 2) exhibited excellent damping capacity and unusual damping growth in the high-strain amplitude stage; the damping capacity of alloy 2 exceeded that of alloy 1 and even approached that of pure Mg when the strain amplitude exceeded 5×10 −4 . This observation is believed to be related to the formation of long and parallel dislocation configurations and the interactions between these dislocations and plastic second-phase particles. The study also showed a remarkable improvement in the mechanical properties of as-extruded Mg–Cu–Mn–Zn–Y alloys. We attribute this finding to dynamic recrystallization, dispersion strengthening, and work hardening during hot extrusion.