Large true strain (up to ~4.7) through hybrid severe plastic deformation (HSPD) technique was imparted to Mg–4Zn–4Gd alloy, to study its influence on microstructural evolution, fracture toughness and tensile properties in the present work. The tensile and fracture toughness of processed Mg alloy were compared with solutionized bulk Mg alloy. The tensile properties are found to be superior in multiaxially forged followed by repetitive rolled specimen at 723 K compared to ST sample. The key strengthening mechanisms such as microstructural bimodality, coherency of the twin boundaries, and precipitation are characterized in detail, to elucidate the enhancement in hardness (~61%), tensile (~62%), yield (~42%) and elastic-plastic fracture toughness (~40%) properties. These improvements are observed in the optimised thermo-mechanically processed condition “6 pass hot forged followed by 75% repetitive hot rolled (6PF-75R) specimen”. However, high dislocation density observed in 6PF-75R specimen leads to lower the ductility compared to other HSPDed conditions but still found higher than that of the solutionized specimens. The fracture phenomena were also explored through post-deformation processed samples through scanning electron microscopy based fractograph to understand the response of different processed specimens using tension and fracture tests. Various microstructural features such as microshear bands, nano-twinning, slip clusters and especially the effect of continuous dynamic recrystallization upon varying true strain are examined by using high-resolution transmission electron microscopy (HR-TEM) and low angle annular dark field scanning transmission electron microscopy (LAADF-STEM) techniques. Correlation of these features with tensile and fracture behaviour are made with the support of light microscopy and X-ray diffraction techniques. © 2019 Elsevier B.V.