Microstructures and mechanical properties of AM60 magnesium alloy with Sm and Ti addition were investigated through OM, SEM XRD and DNS100 electronic universal testing machines. The results show that the alloy grains can be rinfined by the addition of Sm and Ti.The morphology and distribution of beta-Mg17Al12 phase changed from continuous/discontinuous netlike or strip form to cobble or particulate form and even dispersed,respectively.The addition of Sm and Ti obviously improves the microstructure. There are some Al3Ti phase formed after the additon of Ti. Particle phase of Al2Sm,Mg41Sm5 and spherical phase of Al18Ti2Mg3 formed when the addition both of Sm and Ti. The Rod-shaped phase in the alloy dismissed or transformed roundly and massive particles become smaller after the inoculation of Ti and T-6 process subsequently. With addition of 1.0% Sm and 0.4%Ti both, the tensile strength and elongation reached 226MPa and 6.7% , elevated by 34.5% and 39.6% respectively;The heat tensile strength and elongation at 200 degrees C reached 170Mpa and 10.4%, elevated by 53.2% and 82.5% respectively. T6 process can further enhance the mechanical properties of AM(60).