The process of new fine grain formation was studied in compression of a Ni-20%Cr alloy at temperatures ranging from 500°C (0.46Tm) to 950°C (0.73 Tm) at a strain rate of 710-4 s-1. Two types of deformation behaviors with different features of microstructure evolution were observed, depending on processing conditions. The deformation behavior under flow stresses below about 500 MPa (relatively high temperatures) was typical for hot working associated with discontinuous dynamic recrystallization (DRX). The extensive local migration (bulging) of both initial and deformation induced high angle boundaries (HAGBs) resulted in the development of nuclei, which grew out leading to the formation of recrystallized structure with grain size of D > 1 m. Numerous annealing twins were observed within these DRX grains. On the other hand, continuous DRX gave a major contribution to the formation of new grains at applied stresses above 500 MPa (relatively low temperatures). This fact was attributed to a low mobility of grain boundaries. The new grains with size of D < 1 m were evolved due to gradual transformation of deformation induced low angle boundaries (LAGBs) into HAGBs.