Warm compression tests of AZ31 Mg alloy were carried out at five temperatures in 30°C intervals from 210°C to 330°C. The samples of different thickness which were machined from as-cast and pre-strained AZ31 billets were compressed into thickness 1mm and then cooled in the air to room temperature. The microstructural evolution of AZ31 Mg alloy was investigated during warm compression forming. The results show that all the samples have undergone a microstructure changes to different scales in the range investigated. The twinning is the predominant deformation mechanism for magnesium alloys at moderate temperatures and its occurrence is dependent on temperature and strain. Microstructural evaluation indicates that the mean size of the recrystallised grains decreases with increasing effective strain and temperature because of sufficient dynamic recrystallization. The original grain has significant influence on microstructural evolution during warm forming.