AMg-3.4Y-3.6Sm-2.6Zn-0.8Zr alloy was fabricated via selective laser melting (SLM), and the effects of solution and aging heat treatments on its microstructure and mechanical properties were systematically investigated. The SLM processing parameters were optimized (laser power: 60 W, scanning speed: 300 mm/s, layer thickness: 20 μm), followed by solution treatment (500 ℃ for 12 h) and aging treatment (225 ℃ for 0~50 h). The microstructural evolution was analysed via SEM, TEM, and XRD, and the compressive properties and hardness were evaluated. The results show that after 40 h of aging, the peak hardness of the alloy reaches 93.9 HV. Nanoscale β′ precipitates (~7 nm×3nm) form within the grains, whereas Mg24Y5 and a small amount of Mg41Sm5 phases are observed at the grain boundaries, along with the formation of layered Mg12(Y, Sm)Zn (14H-LPSO structure). Compared with those in the solution-treated state, the yield strength and compressive strength of the aged alloy decrease by 11.3% (338 MPa) and 11.2% (469 MPa), respectively, whereas the compressive strain increases by 5%(21.4%). This improvement in plasticity is attributed to the heterogeneous deformation mechanism of the LPSO phase. The study reveals that the strengthening mechanism of the SLM-processed rare-earth magnesium alloy is primarily phase transformation strengthening, whereas the coarsened grain boundary precipitates lead to deterioration of the mechanical properties. In contrast, the LPSO phase significantly enhances plasticity.