The microstructure of the 18R-type long period stacking ordered (LPSO) phase in Mg 97 Y 2 Zn 1 alloy was investigated by the first principles calculation. The arrangement rule of Zn and Y atoms in the LPSO structure is determined theoretically. The calculation results reveal that the additive atoms are firstly located in the fault layers at the two ends of the 18R-type LPSO structure, and then extend to fault layers in the interior, which is in good agreement with the experimental observations. This feature also implies the microstructural relationship between 18R and other LPSO structures. The cohesive energy and the formation heat indicate the dependence of the stability of 18R LPSO structure on contents of Y and Zn atoms. The calculated electronic structures reveal the underlying mechanism of microstructure and the stability of 18R LPSO structure.