Commercial MgAlZn alloy AZ31 was processed by hot extrusion and equal channel angular pressing (ECAP) known as EX-ECAP. Microstructure and defect structure evolution with strain due to ECAP were investigated by TEM, positron annihilation spectroscopy (PAS), and X-ray diffraction. Significant grain refinement was obtained by EX-ECAP. In the extruded condition relatively low density of dislocations was determined by PAS. Sharp increase of dislocation density occurred during the first two passes of ECAP, followed by the saturation and even a decline manifesting the dynamic recovery at higher strains. XRD line profile analysis confirmed the results of PAS with slightly higher values of dislocation densities in individual conditions. Detailed analysis of contrast factors allows to determine the type of dislocations and to draw conclusions about slip activation and its variations with strain. The influence of microstructure evolution on mechanical properties is discussed.