The as-rolled AZ31 Mg alloy sheets were subjected to accumulative roll-bonding (ARB) at 300 degrees C up to three cycles. The microstructure and macro- texture are investigated by means of optical microscopy and X-ray analysis. The mechanical properties are evaluated by micro-hardness and tensile tests. Very fine grain size of 2.4 mu m could be achieved after three passes of 50% thickness reduction. The recrystallized structure was already formed after one cycle of ARB. ARB processing resulted in a significant increase of ductility and slight decrease of tensile strength of the AZ31 alloy sheet. Basal texture was notably weakened after ARB processing.