AZ31 magnesium alloy profiles were prepared by continuous rheo-extrusion, and effects of annealing temperature and time on recrystallization of AZ31 magnesium alloy were investigated. The results reveal that when the profile is annealed in the temperature range from 200°C to 300°C, the moving velocity of grain interface with different dislocation densities on both sides increases with increasing annealing temperature, which is favorable to the formation of crystallized nucleus in the region in which interface sweeps over. As a result, the time required by the accomplishment of recrystallization becomes short. After recrystallization finishes, continuous temperature rise or prolonged holding time result in grain growth. When the profile is annealed at elevated temperature, with the prolongation of holding time, the grain growth rate accelerates obviously, and hence recrystallized microstructure becomes coarse. When the profile is annealed at lower temperature, the grain growth rate becomes small, and the time required by the accomplishment of recrystallization is long, but recrystallized microstructure is fine and homogeneous. When the profile is annealed at 250°C for 4h, average recrystallized grain size is 15μm.