AZ31 magnesium alloy bar with radial gradient microstructure was prepared by three-roll skew rolling process (TRS), and achieving an excellent combination of ductility and strength. To elucidate the formation mechanism of this gradient microstructure, the deformation behavior during rolling was analyzed through experiments and simulations. The simulation results indicated that the metal flow of the bar in a spatial helical trajectory during rolling, with the trajectory inclination angle gradually decreasing from the center to the surface, promoting dynamic recrystallization in the surface and near-surface regions. The radial equivalent strain decreased from 1.5 at the surface to 0.01 at the center, and the shear strain decreased from 0.051 at the surface to 0.00012 at the center. Experimental results showed that the grain size of the bars decreased from 49.77 µm at the center to 19.72 µm at the surface, and the tensile twin volume fraction decreased from 34.1 % to 19.4 %. Dynamic recrystallization predominantly occurred in the outer ring region of the bars, while significant {10−12} tensile twin activation was observed in the central region, with twin-induced dynamic recrystallization observed at the twin boundaries. Mechanical property tests demonstrated that the gradient structure endowed the bars with a favorable combination of strength and elongation, with hardness significantly increasing from 50 HV at the center to 90 HV at the surface. This indicates that the three-roll skew rolling technology effectively promotes dynamic recrystallization at the surface, and the resulting gradient microstructure achieves an excellent combination of strength and plasticity in magnesium alloy bars.