Disks of an AZ31 magnesium alloy were processed by High-Pressure Torsion (HPT) at 463 K to different numbers of rotations. The grain structure was evaluated along the cross-section of the disks using optical microscopy. Significant heterogeneities in the average grain size were observed in areas of the disks which were located at similar distances to the center but at different distances from the surface. Moreover, different grain structures were observed in neighboring areas and shear bands occurred at several locations in the disks. Microhardness tests revealed differences in the strength of the material as a function of the distance to the surface. An analysis of the grain structure and hardness distribution suggests the occurrence of flow localization in HPT processing.