Thermal compression tests of AZ61 magnesium alloy was performed at deformation temperature 150-400°C and strain rates ranged from 0.01s-1 to 10s-1, and the microstructure were observed for deformation specimens. The result shows that dynamic recrystallization (DRX) was happened under the center warm deformation condition for AZ61 alloy. The values of stress peak decrease when the deformation temperature increase, the grain size grows up at the same time. On the other hand, the critical strain increase and the grain size get smaller with the strain ratio increasing. Therefore temperature and strain ratio can make a great effect on the microstructure and mechanical properties of AZ61 alloy, but temperature is a more important factor.