The deformation and recrystallization behaviour of two magnesium alloys, WE43 and an experimental “Alloy A1” containing a large amount of second phase, have been investigated. Optical microscopy and electron backscattered diffraction (EBSD) were used to observe each alloy after deformation in a channel die at 553 and 558 K and subsequent recrystallization during annealing at 673 K. Alloy A1 dynamically recrystallised during deformation at 553 and 558 K. In WE43 the particle distribution affected the onset of dynamic recrystallization. Both alloys exhibited evidence of particle stimulated nucleation (PSN) of recrystallization at second phase particles as well as recrystallization at pre-existing grain boundaries. The A1 and WE43 alloys were extruded at temperatures of 573 K and 633 and 663 K, respectively. The extruded microstructures were compared to those that developed during channel die deformation.