The newly developed Mg–5Y–3Nd–3Zn–0.6Zr alloy exhibits excellent mechanical properties at elevated temperatures, indicating its potential for aerospace applications. To evaluate its workability, the hot deformation behavior is studied through hot compression experiments. The constitutive equation and hot processing map are established based on true stress–strain curves, and the microstructure evolution under different deformation conditions is characterized using optical microscopy, electron backscatter diffraction, and transmission electron microscopy. The constitutive equation indicates that the alloy exhibits high deformation activation energy, which is attributed to the pinning effect of thermally stable long period stacking ordered and W phases on dislocation slip. According to the processing maps, the optimal processing window is identified as 467–475 °C/0.001–0.034 s −1 (with η > 0.35), where complete dynamic recrystallization (DRX) occurs. Microstructure analysis reveals that continuous dynamic recrystallization predominates at low lnZ (55–57) with a high DRX fraction above 90%, while limited discontinuous dynamic recrystallization is observed at high lnZ (64–66) with a low DRX fraction below 10%. This study clarifies the deformation mechanisms and provides critical guidelines for optimizing the hot working parameters of this alloy.