Magnesium is the lightest structural metal with a density of only 1.74 kg/dm3. Furthermore the yield strength and fracture strain of cast magnesium alloys are as good as those of common grade aluminum alloys. Because of these favorable properties there is a lot of interest from the automotive industry to use magnesium and its alloys in order to produce lighter vehicles. Because of its hexagonal crystal structure magnesium displays a very high mechanical anisotropy and a poor formability. In order to address these problems the influence was studied of dynamic recrystallization (DRX) on the microstructure and texture during compression of AZ31 samples (Mg-3%Al-1%Zn). Cylindrical samples were subjected to uniaxial compression tests at various temperatures and strain rates. The occurrence of DRX is revealed by optical micrographs that display bulging grain boundaries and the formation of newly formed grains. As DRX leads to grain refinement and grain refinement leads to an increased strength, DRX is an appropriate instrument to improve the strength of this alloy. The texture evolution and the volume fraction of recrystallized grains during DRX are monitored by orientation microscopy. The orientation microscopy postprocessing software allows to calculate the textures of both original and recrystallized grains separately. It is shown that the recrystallized grains have a much more random texture than the original ones and that increasing the temperature and decreasing the strain rate have a positive effect on the randomization of the texture. Previous research has shown that a near random initial texture produces a better formability (more than 40% failure strain at room temperature in a compression test) for this alloy . This demonstrates that DRX can give rise to an improved ductility.