The article deals with the grain refinement and microstructure evolution of AZ61 magnesium alloy subjected to sever plastic deformation (SPD) by ECAP (Equal Channel Angular Pressing) process. The commercial hot extruded AZ61 alloy subjected to severe plastic deformation possesses a two-phase microstructure consisting of solid solution matrix and massive -phase Mg17Al12 distributed mostly at grain boundaries. Based on selected area diffraction and electron back scattered diffraction applied to a sample after the third pass, it can be concluded that plastic deformation induced by ECAP occurs mainly by slip mode forming a high density network of dislocation inside the grains. The grains size was significantly refined to 1.4 μm after the third pass of ECAP. The refinement of grain size is probably due to polygonization process associated with formation of high angle grain boundaries due to dislocations rearrangement. Mg17Al12 precipitates of size scattered from 100 to 200 nm and also the primary precipitates of Al6Mn phase were observed in this alloy.