A magnesium alloy AZ21 was multi-directionally forged at room temperature to cumulative strains of ΣΔɛ=1.5 and then subjected to various annealing treatments. The results showed that the initial grains were gradually subdivided into ultrafine ones by mechanical twins. The annealing temperature had a pronounced effect on the microstructural evolution. At 523K, a homogeneous structure with a mean grain size of 3.8μm was obtained, which exhibited remarkable texture weakening compared with the as-annealed specimen, resulting in significantly increase of ductility and stretch formability. Increased and decreased annealing temperature can both lead to a coarsening of grain size. Moreover, the analysis on the recrystallization kinetics during annealing indicated that it could be well described by Johnson–Mehl–Avrami–Kolmogorov model and the activation energy for recrystallization was calculated to be about 63.4kJ/mol.