In this study, isothermal torsion tests were carried out on magnesium AZ31B alloy under constant strain rate conditions, in the range of 250 to 400oC at 0.01, 0.1, and 1.0 s-1. Alloy flow stress dependence on strain rate and temperature can be described by a power law with activation energy of 130 kJ/mol. Microstructural examination of hot deformed samples shows very fine recrystallized grains decorating grain boundaries of larger gains in the form of a necklace. These fine grains are produced by dynamic recrystallization at the grain boundaries of original grains. Microstructure evolution, based on samples quenched at different strain levels, indicates that increasing deformation strain has little effect on recrystallized grain size but widens the recrystallized region, with full recrystallization achieved at a certain high strain level. Recrystallized grain size increases with increasing deformation temperature and strain rate. The latter suggests recrystallization in AZ31 to be essentially a time dependant phenomenon.