Adiabatic shear bands (ASBs) are known to be the dominant damage mechanisms in structural materials under high strain rate loading such as Magnesium (Mg) alloys. Therefore, to tailor the mechanical performance of Mg alloys for structural applications, there is a need to understand their susceptibility to strain localization and formation of ASBs, including the mechanism of crack initiation and propagation.In this study, as-fabricated (extruded) and heat-treated (annealed at 400 o C) AZ31B Mg alloys were subjected to high strain rate loading using the direct impact hopkinson pressure bar (DIHPB) under different strain rates (834-2435 s − 1 ) at room temperature. The impact specimens failed through the occurrence of strain localization, formation of diffused ASBs and initiation/propagation of micro-cracks along the path of evolved ASBs. Thus, strain localization results in crack initiation and propagation despite the inherent brittle nature of the Mg alloys. Also, the presence of fractured second-phase particles dispersed within voids and along shear band path suggests particle fragmentation and re nement due to the strain localization. This also resulted in void nucleation, growth and coalescence at a later stage during the deformation. In addition, there seems to be a threshold strain rate ( ~ > 2225 s − 1 ) beyond which the specimen fractures regardless of the initial microstructure of the Mg alloys.