In order to study the mechanism of grain refinement induced by laser shock processing(LSP) in AZ31 magnesium alloy, the specimens were processed with Nd:glass pulse laser shocking and the microstructures of LSP specimens near the surface were examined by optical microscopy and transmission electron microscopy. Optical microstructure pictures show that the size of grains formed in the top surface layer is about 4-6 μm, which is obviously different from the original grains(with an average size of 20-30 μm) in the substrate in AZ31 magnesium alloy. Transmission electron microscopic observations show that the grain refinement process of AZ31 alloy by laser shock processing includes three stages. At the early stage of LSP, the lower strain and strain rate activates the three dislocation slip systems which include basal plane system, prismatic plane system and pyramidal plane system, with the deformation governed mainly by dislocation. At the intermediary stage, dislocation slip is hindered at grain boundaries and becomes more difficult to continue during LSP. Then, parallel twins appear, which divide the original coarse grains into finer twin platelets. Finally, high-density dislocation walls are formed and subdivide twins into sub-grains. Dynamic recrystallization occurs in the process of further deformation and forms recrystallized grains when strain energy reaches the value needed by recrystallization, which leads to refinement of the grains in the top surface layer. In order to study the mechanism of grain refinement induced by laser shock processing (LSP) in AZ31 magnesium alloy, the specimens were processed with Nd: glass pulse laser shocking and the microstructures of LSP specimens near the surface were examined by optical microscopy and transmission electron microscopy. Optical microstructure pictures show that the size of grains formed in the top surface layer is about 4-6 μm, which is obviously different from the original grains (with an average size of 20-30 μm) in the substrate AZ31 magnesium alloy . Transmission electron microscopic observations show that the grain refinement process of AZ31 alloy by laser shock processing includes three stages. At the early stage of LSP, the lower strain and strain rate activates the three dislocation slip systems which include basal plane system, prismatic plane system and the pyramidal plane system, with the deformation governed mainly by dislocation. At the intermediary stage, dislocation slip is hindere Then, parallel twins appear, which divide the original coarse grains into finer twin platelets. Finally, high-density dislocation walls are formed and subdivide twins into sub-grains. Dynamic recrystallization occurs in the process of further deformation and forms recrystallized grains when strain energy reaches the value needed by recrystallization, which leads to refinement of the grains in the top surface layer.