Abstract: The effect and mechanism of rare earth doping on the martensitic transformations of Mg-Sc alloys were investigated via first-principles calculations. The results show that the d-orbital electrons of Y, Gd and Nd atoms enhance the p-d hybridization between Mg and Sc atoms, leading to a strengthening of stability of martensite relative to austenite. The optical vibration of Y atom is strong which couples with the optical vibrations of Mg and Sc atoms, increasing the dynamic stability of martensite. The Gd or Nd atom promotes the shift of Mg-Sc phonon DOS toward the lower phonon frequency, and the acoustic vibration of Gd or Nd atom is coupling with that of Mg and Sc atoms. They cause a significant reinforcement in the acoustic vibration of Mg-Sc, thus weakening the dynamic stabilities of austenite and martensite but the stability reduction of austenite is greater than that of martensite. Accordingly, the doping of Y, Gd and Nd increases the internal energy difference between austenite and martensite at 0 K, thus raising the martensitic transformation temperature up to 315 K, superior to the other Mg-Sc alloys.