The development of technological methods for processing and manufacturing of functional (with a priori targeted properties) polycrystalline materials and products made of these materials still remains an acute problem. A multilevel modeling approach offers researchers the opportunity to describe inelastic deformation by applying internal variables that give an effective characterization of the material structure at different structural scale levels. High temperature plastic deformation is accompanied by these processes, which leads to a significant rearrangement of the meso- and microstructure of the material. The most substantial contribution to changing the properties of polycrystals is made by the evolution of grain and defect structures at the expense of dynamic recrystallization, which significantly depends on dynamic recovery. In this paper, we consider the problem of the coalescence of subgrains undergoing rotation during inelastic hot deformation. This process is called subgrain coalescence, and it is one of the dynamic recovery mechanisms responsible for changes in the fine subgrain structure. Under applied thermomechanical loads, the coalescence process promotes the formation of recrystallization nuclei and their subsequent growth, which can greatly change the grain structure of a polycrystal. The problem was solved in terms of the advanced statistical model of inelastic deformation, modified to describe the subgrain coalescence process. The model takes into account the local interactions between contacting structural elements (subgrains). These have to be considered so that the grain coalescence caused by a decrease in subboundary energies during their progressive merging can be adequately analyzed. For this purpose, a subgrain structure quite similar to the real structure was modeled using Laguerre polyhedra. Subgrain rotations were investigated using the developed model, which relies on the consideration of the excess density edge component of the same sign dislocations on incidental subgrain boundaries. The results of modeling of a copper polycrystal are presented, and the effects of temperature and strain rate on the subgrain coalescence process is demonstrated.