Tensile tests with small deformation amounts of 0.5%, 1%, 3% and 5% were performed at room temperature on as cast Mg-1%Al alloy. Microstructures of the Mg-1%Al alloys before and after deformation were observed by optical microscopy (OM) and transmission electron microscopy (TEM). The strain amplitude dependent and temperature dependent damping capacities of the as-cast and deformed Mg-1%Al alloys were investigated by dynamic mechanical analysis (DMA). The mechanism of deformation on damping capacity of Mg-1%Al alloy was discussed. The results show that the as-cast Mg-1%Al alloy has high damping value at high strain. When the tensile elongation is higher than 3%, the damping values of this alloy in high strain region are significantly decreased at room temperature. But the large amount of dislocations produced by tensile deformation are activated by heat, and then increase the damping value at high temperature.