Sheets of Mg-4Er (wt.%) alloy were prepared by multi-pass hot rolling and subsequent annealing. The annealed sheets could be cold-rolled to a high reduction of 95% (corresponding to a rolling strain of 3) by one-pass rolling at room temperature. The evolution of the deformed microstructure of Mg-4Er alloy was investigated during the cold-rolling process. The results suggest that multiple dislocation slips are the predominant deformation mode responsible for the remarkable rolling plastic strain. Meanwhile, the multiple dislocation slips are favorable to a continuous restoration process, which can accommodate the rolling strain by absorbing the deformation energy.