The application of magnesium alloys is hindered by the inherent contradiction between mechanical performance and thermal conductivity. Achieving simultaneous enhancement of both properties is crucial for broadening their applications. In this study, Mg-5Zn-xCu-0.5Zr (x = 0, 0.5, 1, 2) alloys were fabricated using semi-solid rheo-diecasting (RDC). The microstructure was characterized via OM, SEM, XRD, TEM and EBSD, and its influence on mechanical properties and thermal conductivity was analyzed. The results show that adding Cu refines the grain size, induces the formation of the MgZnCu phase, and reduces solidification shrinkage defects. The RDC Mg-5Zn-xCu-0.5Zr alloy features a heterogeneous microstructure comprising primary α-Mg (α1) with low solute content, secondary α-Mg (α2) with high solute atom content, and intergranular second phases. This heterogeneous structure synergistically enhances both mechanical properties and thermal conductivity. Specifically, α1 grains and the MgZnCu phase reduce lattice distortion, thereby improving thermal conductivity, while α2 generates more dislocations during tensile deformation, contributing to enhanced mechanical properties. Additionally, a small amount of MgZnCu phase contributes to simultaneous improvements in both properties. However, excessive MgZnCu phase can lead to stress concentration due to dislocation pile-up, causing fracture and degrading mechanical properties. Among the alloys studied, the Mg-5Zn-1Cu-0.5Zr alloy exhibits the best combination of mechanical and thermal properties, with a tensile strength of 221 MPa, yield strength of 109 MPa, elongation of 5.72%, and thermal conductivity of 113.8 W/(m·K). This demonstrates the successful simultaneous enhancement of both mechanical and thermal properties in magnesium alloys.