Elevated temperatures lead to a reduction in the strength of magnesium-based alloys. At elevated temperatures (200–300 °C), even rare-earth reinforced Mg alloys experience notable strength deterioration. In this paper, the additions of different composition (0.4 and 0.8 wt.%) of Ca or Al in Mg-7Y-3Zn-0.4Mn alloy is added to increase the service temperature. The strength of Mg-7Y-3Zn-0.4Mn is effectively improved by Al element and higher after more Al is added, particularly at 300 °C. Specifically, the ultimate tensile strength (UTS) of Mg-7Y-3Zn-0.4Mn alloy increases from 181 MPa to 213 MPa by adding 0.8 wt.% Al. Remarkably, the UTS declines merely by 36 MPa (from 249 to 213 MPa) between 200 °C and 300 °C. And at both RT and elevated temperature (300 °C), Al alloying effectively improves the EL of Mg-7Y-3Zn-0.4Mn alloy, with improvements from 5.4% to 14.4% and 8.2% to 23.1%, respectively. Al element has dramatically increased the thermal stability and more significant effect at higher temperature. After prolonged annealing at 475 °C for 48 h, the Mg-7Y-3Zn-0.4Mn-0.8Al alloy shows only a limited increase in grain size from 16.9 to 23 µm. Even after annealing at 525 °C for 48 h, the Mg-7Y-3Zn-0.4Mn-0.8Al alloy maintains a grain size of approximately 41 µm. However, the growth of grain in basic alloy and 0.4 wt.% Ca alloy exceeds 150 µm. For microstructure, Ca addition primarily promotes LPSO phase formation and subsequent coarsening. Alloying with Al leads to three distinct microstructural changes: the LPSO phase transitions from interconnected networks to discrete blocks, Al₂Y particles precipitate homogenously, and second phases distribute more uniformly. And the texture is also weakened by Al element. Essential mechanisms of Ca/Al effects on mechanical properties, thermal stability, and microstructure in Mg-7Y-3Zn-0.4Mn alloys are investigated.