The precipitates inside deformation twins may block the dislocation motion and consequently affect the mechanical property of materials. Herein, at the atomic level, we directly visualize that the basal dislocation slips shear the twinned stacking faults (TSFs) within the deformation twins in an Mg–Zn–Y alloy containing long-period stacking ordered (LPSO) structures. The TSFs, enriched with solute atoms, could be considered as precipitates inside deformation twins. They are sheared by a single step or multiple shearing steps on the basal plane. The microstructural fingerprints, i.e., the width of basal shearing steps, enable a quantitative assessment of the local and total plastic shear strain due to the basal dislocation within the deformation twins. The TSFs can block dislocation slip, while the dislocation shearing induces large lattice distortion and even solute atoms redistribution at local intersection. The TSFs-dislocation interaction is expected to lower the basal dislocation motion and resultantly modulate the mechanical properties of magnesium alloys. These results may offer a novel strategy for strengthening and toughening magnesium alloys via tailoring the shearable precipitates.