Influence of roller burnishing (RB) on high cycle fatigue properties of the hot-rolled Mg-12Gd-3Y (wt.%) magnesium alloy was investigated. RB can significantly improve the fatigue life of the Mg-12Gd-3Y alloy. After RB, the fatigue strength (at 10⁷ cycles) in the as-rolled alloy and the aging heat-treated (T5-treated) specimens increased from 150 and 155 MPa, to 225 and 210 MPa, respectively. RB led to a subsurface fatigue-crack nucleation in both the as-rolled and the T5-treated materials. In the as-rolled alloy, small cracks (in the stage I) propagated along cleavage planes after RB. In contrast, in the T5-treated specimens, the small cracks grew by coalescence of the sheared dimples. RB introduced a work-hardened case and compressive residual stresses in the near-surface region, which effectively retarded the fatigue-crack nucleation and/or propagation, leading to an improvement in fatigue life.