This paper studies the conditions under which strain localisation occurs in partially solid alloys and compares localisation in rheology experiments with features in the industrial processes of Thixomolding® and high pressure die casting (HPDC). To study the fundamentals of localisation, vane rheometry, modified to measure volumetric changes, is used to shear magnesium alloy AZ91 during solidification. Deformation is found to readily localise when the initial microstructure consists of an assembly of crystals in contact. It is shown that such microstructures expand as they are sheared due to Reynolds’ dilatancy, and that localisation takes the form of dilatant shear bands. A study of microstructural features in industrial castings demonstrates that similar dilatant shear bands can form during Thixomoulding® and HPDC.