High pressure torsion (HPT) was performed at room temperature on a Mg-8.2Gd-3.8Y-1.0Zn-0.4Zr (wt%) alloy containing long period stacking ordered (LPSO) phase with a 6.0 GPa pressure. The microstructure evolution and hardening mechanisms were analyzed. TEM shows that, with increasing HPT strain, the LPSO lamellar-shaped and block-shaped particles experience kink bending, fragmentation and dissolution; and eventually a supersaturated solid solution with nanosized grains is obtained. The decomposition of LPSO phase at room temperature is attributed to the high defect concentrations generated in the LPSO lamellae and blocks, and the Mg-rich phase. With equivalent strains increasing to ~6.6 (16 HPT revolutions), an exceptional grain refinement to 52 ± 2 nm is achieved, and the hardness is enhanced to 128 ± 2 HV. A quantitative model shows the hardness increase is due to the combined effects of nanosized grains, high dislocation density and dissolved alloying elements. XRD line broadening analysis, thermodynamic modelling software and elemental mapping are used to support the mechanistic interpretations.