Abstract: The quasicrystal phase is beneficial to increasing the strength of magnesium alloys. However, its complicated structure and unclear phase relations impede the design of alloys with good mechanical properties. In this paper, the Mg₄₀Zn₅₅Nd₅ icosahedral quasicrystal (I-phase) structure is discovered in an as-cast Mg–58Zn–4Nd alloy by atomic resolution high-angle annular dark-field scanning transmission electron microscopy (HAADF-STEM). A cloud-like morphology is observed with Mg_41.6Zn_55.0Nd_3.4 composition. The selected area electronic diffraction (SAED) analysis shows that the icosahedral quasicrystal structure has 5-fold, 4-fold, 3-fold, and 2-fold symmetry zone axes. The thermodynamic stability of the icosahedral quasicrystal is investigated by differential scanning calorimetry (DSC) in the annealed alloys. When annealed above 300°C, the Mg₄₀Zn₅₅Nd₅ quasicrystal is found to decompose into a stable ternary phase Mg₃₅Zn₆₀Nd₅, a binary phase MgZn, and α-Mg, suggesting that the quasicrystal is a metastable phase in the Mg–Zn–Nd system.