AZ31B Magnesium alloy sheets with about 1 mm in thickness were rolled by one pass and several passes from the extruded ingots with different thickness. The effects of processing variables on microstructure and mechanical properties of AZ31B Mg alloy sheets were investigated. XRD indicated that AZ31B magnesium alloy sheets have a dominant texture with (000l) orientated plane. The large deformation results in the formation of fine and homogeneous microstructure due to the recrystallization during extruding and hot-rolling. The thinnest sheet rolled by several passes showed equiaxed grains with 5-10μm in diameter. The fine grains result in the increase in the strength and the ductility. The tensile strength of the sheet rolled by several passes reached 292 MPa and the elongation was twice as larger as that rolled by one pass.