Dry friction and wear tests were performed on as-cast Mg97Zn1Y2 alloy using a pin-on-disc configuration. Coefficients of friction and wear rates were measured as a function of applied load at sliding speeds of 0.2, 0.8 and 3.0 m/s. The wear mechanisms were identified in the mild and severe wear regimes by means of morphological observation and composition analysis of worn surfaces using scanning electron microscope (SEM) and energy dispersive X-ray spectrometer (EDS). Analyses of microstructure and hardness changes in subsurfaces verified the microstructure transformation from the deformed to the dynamically recrystallized, and properties changed from the strain hardening to dynamic crystallization (DRX) softening before and after the mild–severe wear transition. The mild–severe wear transition can be determined by a proposed contact surface DRX temperature criterion, from which the critical DRX temperatures at different sliding speeds are calculated using DRX dynamics; hence transition loads can also be calculated using a transition load model. The calculated transition loads are in good agreement with the measured ones, demonstrating the validity and applicability of the contact surface DRX temperature criterion.