Alloys based on Mg–rare earth (RE) systems are of increasing technical interest in automotive powertrain applications due to their superior elevated temperature creep resistance. However, there is a deficiency in the literature of phase diagrams of multi-component RE systems that could assist alloy development and composition refinement for enhanced property optimization. The phase relationships in the Mg-rich corner of the Mg–Ce–Nd system have been investigated through the evaluation of selected compositions in the as-cast and heat-treated condition. Consistent thermodynamic CALPHAD-type assessments have also been generated for the Mg–Ce–Nd system. It is shown that this system reveals a significant degree of metastability under technologically significant solidification conditions (i.e. permanent-mould or high-pressure die casting). This is simulated in thermodynamic calculations by suppression of the RE5Mg41 phase and reasonable agreement is found with the as-cast microstructures. After heat treatment these microstructures transform, depending on the alloy composition, into phase assemblies consistent with the calculated stable equilibrium phase diagram. It is the elucidation of such metastable phase formation and the subsequent transformation from the as-cast to the heat-treated state that is a particular strength of the thermodynamic approach and which makes it a powerful tool for alloy development.