Specific gravity segregation that occurs during the smelting process always leads to the low composition homogeneity and poor performance stability of the magnesium-rare earth (Mg-RE) alloys. In this study, the segregation behavior of Mg–Gd alloy was investigated by sampling from different locations in the ingot fabricated in a resistance furnace without a pouring process. The combined application of induction-heating and mechanical stirring with various speeds (0–130 r/min) was applied to promote the distribution homogeneity of Gd atoms. In the resistance-heating fabricated ingot, Gd content at the bottom section reaches 407% of that at the top. The coarse dendrites surrounded by the network-like eutectic structures are responsible for the brittle fracture with a poor elongation of 3.7%. By the combined employment of the induction heating and mechanical stirring with the speed of 87 r/min at 740 °C for 40 s, the variation of the Gd content within the whole ingot can be reduced to be the minimum of 0.23 wt%. Corresponding formation and regulating models of segregation were also proposed. However, the cooling rate of the melt is reduced by the continuous increase of the stirring speed to 130 r/min, which results in the grain coarsening and lower homogeneity of the ingot.