In this study, by adjusting the homogenization process, numerous lamellar-shaped γ’ phases are generated and uniformly distributed throughout the grain interior within as-extruded Mg-9Gd-4Y-1Zn-0.5Zr (wt.%) alloy, leading to a remarkable increase enhancement in both tensile strength and fracture toughness. Notably, as compared to the alloy containing block-shaped long-period stacking-ordered (LPSO) phase, when the lamellar-shaped γ’ phase is introduced within the α-Mg matrix, the fracture toughness of 29.7 MPa·m ^1/2 can be achieved with a 27 % improvement. This superior fracture resistance is mainly attributed to the delamination toughening derived from the intensive micro-cracks occurring along γ’ phase interfaces oriented perpendicular to the primary fracture surface. Owing to the presence of lamellar-shaped γ’ phase, the fracture morphology can be significantly changed and characterized with deep dimples and pronounced deflection of main crack, which collectively contribute to the enhanced plastic energy dissipation and fracture toughness. The characteristics of deformed microstructure near the fracture surface demonstrate the activation of kinking and the inhibition of twin propagation due to the interactions with lamellar γ’ phase. Such deformation behavior can effectively impede the crack propagation and contribute to the superior fracture resistance. Besides, the X-ray computed tomography analysis of the fractured alloy exhibits the distribution and size of voids, indicating that the prolate voids preferentially nucleate and propagate parallel to the lamellar γ’ phase. Accordingly, the deformation mechanisms under a triaxial stress state involve the intricate interplay between lamellar γ' phase-induced delamination, crack deflection as well as void formation. Through the application of tailored pre-treatment heat treatment processes, the control of phase constituents within the microstructure can be achieved to improve the mechanical properties of Mg alloys. It is anticipated to provide a comprehensive understanding of the fracture behavior of Mg-Gd-Y-Zn-Zr, with particular emphasis on the synergistic effects of lamellar γ' phase and LPSO phase in the optimization of overall mechanical performance.