This study demonstrated the application of equal-channel angular processing (ECAP), which was performed via the BC route, to determine the effect of the addition of CaO on the microstructural evolution of an AZ31 alloy due to annealing. Compression tests were performed to evaluate the mechanical properties of the alloy, and the corresponding microstructures were observed to elucidate the flow behavior. Ca-bearing second-phase particles were fragmented with the increase in the number of ECAP passes. The increase in the yield strength and flow stress with the addition of CaO was attributed to the dispersion of the Ca-bearing second-phase particles. When the CaO-added AZ31 and commercial AZ31 alloys were subjected to annealing, their flow stress decreased owing to the grain growth. However, the extent of the decrease in the flow stress for the CaO-added AZ31 alloy was lower than that for the commercial AZ31 alloy.