Commercial Mg-3Al-Zn alloys (AZ31) with initial large grains (∼250μm) has been found superplastic at a strain rate of 0.5×10−2s−1 and at 350–500 C. The maximum elongation to failure of 170% at 500°C was obtained. Scanning electron microscope observations with electron back-scattering diffraction technique (SEM-EBSD) indicate that during deformation significant grain size reduction occurred, the average grain size reduced from about 250μm before deformation to about 50μm after deformation at temperatures from 300 C to 400°C, it reduced to about 100μm if deformed at above 400°C. The observed grain refinement at lower temperature and grain growth at higher temperature during the superplastic deformation is believed to be the result of the competing processes between dynamic recrystallization and dynamic grain growth, which are temperature and strain rate dependent. Transmission electron microscope (TEM) observations indicates that most of the grain boundaries are large-angle grain boundaries, though small amount of small-angle grain boundaries are also observed. The density of dislocations in the grains is very low in these superplasticlly deformed samples. It is evident that grain boundary played a role as the source and sink of the dislocation, being responsible for combined dislocation creep and diffusional creel. Therefore, the very large elongation obtained at the very high strain rates and high temperatures is attributed to dynamic dislocation hardening, recovery and recrystallization.