A high-strength, high-toughness, weldable and deformable rare earth magnesium alloy comprised of 0.7˜1.7% of Ym, 5.5˜6.4% of Zn, 0.45˜0.8% of Zr, 0.02% or less of the total amount of impurity elements of Si, Fe, Cu and Ni, and the remainder of Mg, based on the total weight of the alloy. During smelting, Y, Ho, Er, Gd and Zr are added in a manner of Mg—Y-rich, Mg—Zr intermediate alloys into a magnesium melt; Zn is added in a manner of pure Zn, and at 690˜720° C., a round bar was cast by a semi-continuous casting or a water cooled mould, then an extrusion molding was performed at 380˜410° C. after cutting. Before the extrusion, the alloy is treated by the solid-solution treatment at 480˜510° C. for 2˜3 hours, however, the alloy can also be extrusion molded directly without the solid-solution treatment. After the extrusion molding, this alloy has a strength of 340 MPa or more and a percentage elongation of 14% or more at room temperature and is a high-strength, high-toughness, weldable and deformable rare earth magnesium alloy.