Strain-induced grain refinement in magnesium alloy AZ61 was studied by means of cyclic bending carried out at a temperature 623K. The deformed microstructures were investigated by optical and SEM/EBSD metallographic observation. The results show that the grain size of the surface layer can be significant refined to about 3 μm by dynamic recrystallization. The volume fraction of new grains increases with strain and reaches a value of 0.8 after 8 passes. Most of the new grains are separated by high angle boundaries. Hardness distribution through thickness for the cyclic bended sheet exhibits “V” shape with the marked difference between the surface and the inside, the hardness is critically increased in surface layer, i.e. ~82 Hv, which is about 1.39 times than the as-received AZ61.