Microstructures and phase compositions of as-cast and extruded ZK60-xHo (x=0 similar to 5) alloys were analyzed by X-ray diffraction, differential scanning calorimetry, optical microscope, scanning electron microscope and transmission electron microscope. Meanwhile, tensile mechanical property and impact toughness were tested. The results showed that as-cast microstructure was refined gradually with increasing the Ho content. Mg-Zn-Ho new phase increased gradually, while MgZn2 phase reduced gradually to disappear. Second phase tended to distribute along grain boundary by continuous network. As-cast tensile mechanical property remained almost unchanged and impact toughness value alpha(nK) was low (9 similar to 17 J/cm(2)). After extrusion by lambda=401T=593 K, grain size reached the micron level (1 similar to 5 mu m) and broken second phase distributed dispersedly. Extruded tensile mechanical property was enhanced obviously. Tensile strength sigma(b) at ambient temperature increased gradually from 355 MPa for ZK60 alloy to 375 MPa for ZK60-4.77Ho alloy, while elongation delta decreased gradually from 19.5% to 12.5%. sigma(b) at 473 K increased gradually from 120 MPa to 169 MPa. Meanwhile, alpha(nK) was enhanced to 26 similar to 54 J/cm(2). Fine grain and few fme dispersed second phase enhanced the tensile mechanical property and impacted toughness of magnesium alloys effectively.