A study has been made on the tensile and creep properties of Mg alloys, with emphasis on the effect of second phase particles. Compositions of the alloys were controlled to have four different microstructures; 1) having thermally unstable particles along grain boundaries, 2) having thermally stable particles along grain boundaries, 3) having thermally unstable particles along grain boundaries and thermally stable particles within matrix, and 4) having thermally stable particles along grain boundaries as well as within matrix. It shows that room temperature strength of the alloys is mainly controlled by the volume fraction of second phase particles, regardless of their distribution. The distribution of second phase particles, on the other hand, has a large effect on the fracture behavior. It shows that the creep resistance of Mg alloys can significantly be improved by the incorporation of thermally stable second phase particles within matrix.