In this study, AZ31 in form of sheet, plate and extruded rod and AZ61 wire with different initial grain sizes were used to investigate the effect of initial grain size on recrystallization behavior and the formation of fine recrystallized grain (the so-called necklace) structure. Nucleation and growth of recrystallized grains along grain boundaries has been examined. In order to observe the effect of initial grain size and deformation on static recrsytallization and necklace formation, the specimens were annealed at 100-250°C for 10min--2hr. Specimens are also stretched to a total strain of 10, 20 and 40% at 300°C at an initial cross head speed of 1x10-3 s-1 for dynamic recrystallization studies. The results suggest that there exists a grain size limit, below which a necklace structure is not observed.