Due to the increasing demand of low density and high strength Mg alloys for the automobile, railway, and aerospace industries, the exploration of cost-effective RE-free Mg alloys becomes more and more attractive. Instead of Mg-Sn based system, the Mg-Bi alloy system seems to satisfy this requirement as a potential candi date, since it shows typical precipitation-type phase equilibrium and contains thermal stable Mg₃Bi₂ phases, which exhibit a high melting temperature of 821 ℃ comparable to those in RE-bearing Mg alloy. In addition, the fine Mg₃Bi₂ plates on the prismatic plane were reported to be more effective than the more commonly observed basal plates for precipitation-hardening. In this work, pure Mg with/without 6% Bi (mass fraction) additions were extruded, and the corresponding microstructure and mechanical properties were investigated. The results show that dynamic recrystallization (DRX) occurs in both alloys after extrusion and these two kinds of specimens exhibit similar extrusion texture. However, the as-extruded Mg-6Bi alloy represents finer and homogenous microstructure, and the average grain size (AGS) decreases from 30 μm to 4 μm when 6% Bi added. In addition, the Mg-6Bi alloy contains strip-like fragmented Mg₃Bi₂ particles along the extrusion direction and fine Mg₃Bi₂ precipitates, and demonstrates superior mechanical properties with tensile yield strength of 189 MPa, ultimate tensile strength of 228 MPa, and an elongation of 19.9%. There is a large number of nano-scale Mg₃Bi₂ particles in the tensile fracture surface of Mg-6Bi alloy. And there is a large number of twins in the microstructure of compression fractured pure Mg sample; while for the Mg-6Bi alloy specimen, with a large number of second phase particles on the α-Mg matrix, little twins are observed. Moreover, the Mg-6Bi alloy also gives a low tension-compression yield asymmetry with yield asymmetric ratio of 1.01. These significantly improvement of mechanical properties are mainly attributed to the combined effects of grain refinement and large quantity of co-exist micro/nano-size Mg₃Bi₂ particles.