2025 is an established wrought heat-treatable alloy used in aerospace applications that demand good damage tolerance combined with medium strength levels. One such application is fixed and variable pitch propeller blades for turboprop aircraft engines. These propeller blades are normally hot forged from extruded bar and the resulting grain structure exerts a profound influence on the exfoliation corrosion resistance. The avoidance of this damage mechanism is important as propeller blades are normally considered to have infinite lives with respect to fatigue and this necessitates a high quality, stable surface finish on the blade. The present study characterises the microstructural development during hot extrusion and forging of 2025, and attempts to determine the influence of microstructural characteristics on the exfoliation corrosion resistance. Poor exfoliation corrosion resistance in 2025 is associated with the retention of an unrecrystallised hot worked sub-grain structure in the final product. If sufficient plastic deformation is retained prior to solution heat-treatment, a recrystallised structure can result and these structures perform well when subject to standard exfoliation tests like ASTM-G34. However, if recrystallisation produces a coarse grain size the tensile properties are diminished. The effects of three different compositions of 2025 with varying wrought grain refining elements are investigated, when subject to hot extrusion and subsequent forging processes at several temperatures. Optical microscopy methods were used to evaluate the deformation microstructure following the forming processes, with particular attention to the degree of recrystallisation. Exfoliation tests were performed in accordance with ASTM-G34 and mechanical tests were also conducted. The results indicate that the hot forming temperature has a significant influence on the microstructure, and therefore on final exfoliation corrosion resistance and mechanical properties of 2025. In order to better understand the influence of plastic deformation and processing conditions on microstructural development of 2025, the forging process has been modelled using the commercial finite element software ABAQUS and MSC.Patran.