The tensile properties and deformation response of an ultrafine-grained (UFG) Al-Mg alloy with bimodal grain structure were investigated using a micro-straining unit and a strain mapping technique. Atomized Al 5083 powder was ball-milled in liquid N-2 to obtain a nanocrystalline (NC) structure, then blended with 50 wt.% unmilled coarse-grained (CG) powder, and consolidated to produce a bimodal grain structure. The blended powder was hot vacuum degassed to remove residual contaminants, consolidated by cold isostatic pressing (CIP), and then quasi-isostatic (QI) forged twice. The resultant material consisted of a UFG matrix and CG regions. The dynamic response during tensile deformation was observed using a light microscope, and the surface displacements were mapped and visualized using a digital image correlation (DIC) technique. The DIC results showed inhomogeneous strain between the UFG and CG regions after yielding, and the strain was localized primarily in the CG regions. Strain hardening in the CG regions accompanied the localization and was confirmed by variations in Vickers hardness.