Magnesium alloys have significant potential for weight reduction in the automotive and aerospace industries however, their poor performance at high temperatures and unstable structures limit their applications. The incorporation of rare earth elements can tackle such defects, with the deformation mechanisms under dynamic loading conditions being of paramount importance. In this study, a Mg-Y-Nd-Gd-Zr rare earth magnesium alloy was subjected to compression using a separated Hopkinson pressure rod at a strain rate of 2600 s-1 to investigate its dynamic compression deformation mechanisms. The microstructural evolution and deformation mechanisms of the material during high-speed compression were analyzed using optical microscopy (OM), electron backscatter diffraction (EBSD), and scanning electron microscopy (SEM). The results revealed that three different types of twins appeared at various stages of deformation as the strain increased after dynamic compression of the Mg-Y-Nd-Gd-Zr magnesium alloy. At a strain of 3%, tensile twins became the predominant type, accounting for 7.4% of the total integral number. At a strain of 12%, both tensile and double twins became dominant, accounting for 7.6% of the total integral number, whereas at a strain of 21%, double twins became dominant, with the total integral number decreasing to 2.5%. In the early stage, tensile twins played a major role, whereas, in the middle stage, basal plane slip, nonbasal plane slip, tensile twin, and double twin contributed to deformation. In the late stage, the prismatic slip started to participate in plastic deformation owing to increased stress. Notably, cracks occurred along the 45 degrees shear direction when the strain reached 32%. These cracks initially initiated at the structural interfaces and twin boundaries, before gradually expanding into cracks that penetrated the entire structure.