This paper explored how the work hardening process enhances the yield strength (YS) of magnesium alloy and established a novel quantitative relationship between microstructure and YS. The YS of an extruded Mg–Nd–Zn–Zr alloy was nearly tripled by rotary swaging at 200 ℃, attributing to dislocation accumulation, grain fragmentation, and basal texture formation. A modified Hall–Petch relationship (GM–HP) was established by introducing the equivalent orientation factor and dislocation density to accurately quantify the YS and the contribution of each strengthening mechanism. The contributions of dislocation hardening and grain boundary strengthening were multiplied by the strong basal texture. This paper offered valuable insights and guidance for designing and optimizing high-strength wrought magnesium alloys and their plastic processing methods.