Influence of solution treatment (T4) and peak-aging (T6) on damping capacity was investigated in permanent-mold cast Mg-3%Nd alloy. In as-cast state, the microstructure was characterized by eutectic $Mg_{12}Nd$ intermetallic phase network in the intergranular region. T4 treatment resulted in a dissolution of the eutectic particles, but small amount of the particles still remained in the microstructure. After T6 treatment, nano-sized ${eta}^{prime}(Mg_{12}Nd)$ particles were precipitated within the matrix. T4 microstructure showed higher damping capacity than as-cast and T6 ones. In view of the microstructural features, this may well be associated with the dissolution of second-phase particles which play a role in pinning the dislocations acting as a damping source.