The hexagonal crystal structure of AZ31 results in a very high mechanical anisotropy and a poor formability of this alloy. In order to address these problems the influence of twinning, slip and dynamic recrystallization (DRX) on the microstructure and texture evolution during compression of AZ31 has been studied over a range of temperatures. Cylindrical samples were tested uniaxially in compression from room temperature to 350oC, with the compression axis parallel to either the normal direction (ND) or the transverse direction (TD) of the hot-rolled sheet from which the samples were cut. The microstructure was characterized using electron backscattered diffraction (EBSD) analysis. Extensive twinning was only observed in the TD samples at all temperatures. The effect of the difference in twinning and slip between the TD and ND samples on the mechanism of dynamic recrystallization has also been investigated. For this, the grains formed during DRX were identified by their appearance in EBSD orientation maps and the orientations of these grains determined.