Multidirectional forging (MDF) was successfully applied to fabricate large-size Mg-Gd-Y-Zn-Zr-Ag alloy in this work and effects of T4, T5 and T6 treatments on the microstructure and mechanical properties of the as-forged alloy were analyzed. Results show that dynamic recrystallization (DRX) occurs and second phase particles precipitate along the grain boundary during the MDF process. After annealing treatment (T4), the volume fraction and size of dynamic precipitates slightly increase at a lower temperature (430 °C) compared with those of MDFed sample, while they are dissolved into the α-Mg matrix at a higher temperature (450 °C). At the meantime, short plate-shaped long-period stacking ordered (LPSO) phases are observed in the DRX grains of the MDFed sample and then dissolved into the α-Mg matrix during annealing at both temperatures. Typical basal texture is identified in the MDFed sample, but the basal pole tilts away from final forging direction and rare-earth texture component with <1121> orientation parallel to penultimate forging direction becomes visible after annealing. The T6 sample annealing at 430 °C for 4 h and ageing at 200 °C for 34 h exhibits the superior strength and ductility in this study. The ultimate tensile strength, tensile yield strength and elongation to failure, which is 455 MPa, 308 MPa and 7.7%, respectively, are overall improved compared with the directly-aged (T5) sample. This paper provides a superior heat treatment schedule to manufacture high-performance large-scale Mg-Gd-Y-Zn-Zr-Ag components for industrial production.