The compression tests were carried out on AZ31 magnesium alloy samples at temperatures from 300 to 450°C and strain rates of 0.03–0.3s−1. The evolution of the microstructure and texture was followed and the volume fractions recrystallized were determined as a function of strain and temperature. The flow curves were analyzed using the double differentiation method and double minima were detected on all the curves. The first set of minima is shown to identify the critical strain for twinning, while the second set indicates the critical strain for the initiation of dynamic recrystallization. The texture analysis and EBSD results indicate that flow softening is mainly caused by the grain reorientations brought about by twinning. The remainder of the flow softening is associated with the volume fraction recrystallized. The microstructure analysis shows that the volume fraction recrystallized does not approach its asymptotic value of one even during steady state flow.