The mechanical properties and microstructure evolution of Mg–8Li–3Al–1Y alloy undergoing different rolling processes were systematically investigated. X-ray diffraction, optical microscope, scanning electron microscopy, transmission electron microscopy as well as electron backscattered diffraction were used for tracking the microstructure evolution. Tensile testing was employed to characterize the mechanical properties. After hot rolling, the MgLi2Al precipitated in β-Li matrix due to the transformation reaction: β-Li → β-Li + MgLi2Al + α-Mg. As for the alloy subjected to annealed hot rolling, β-Li phase was clearly recrystallized while recrystallization rarely occurred in α-Mg phase. With regard to the microstructure undergoing cold rolling, plenty of dislocations and dislocation walls were easily observed. In addition, the microstructure of alloys subjected to annealed cold rolling revealed the formation of new fresh α-Mg grains in β-Li phase due to the precipitation reaction. The mechanical properties and fracture modes of Mg–8Li–3Al–1Y alloys can be effectively tuned by different rolling processes.