The results obtained in the present study reveal the effect of equal channel angular extrusion (ECAE) on the grain size and mechanical properties of Al-Li alloys. During 8 passes of ECAE process, coarse grain microstructure in the initial state transforms into ultrafine grained. The final grain size depends on both total strain applied and Li content in the alloy. Due to the grain refinement the microhardness and yield stress increase by 100%. During compression deformation, the coarse grain alloys exhibit continuous hardening, whereas in the ultrafine-grained alloys, a stagnation of work hardening at the beginning of compression deformation is observed. This behaviour is related to the dynamic recovery of the severely deformed microstructure.