The　microstructure　and　microstructural　evolution　were　investigated　near　crater　wall　in　Al-Cu-Mn　alloy　using　optical　and　transmission　electron　microscopy　(TEM)　after　projectile　impaction.　The　results　show　that　three　characteristic　zones　around　the　crater　can　be　classified　based　on　the　different　microstructure,　i.e.　deformation　bands,　dynamic　recovery　zone　and　adiabatic　shear　bands　(ASBs).　The　TEM　observation　indicates　that　the　dislocation　glide　plays　a　crucial　role　in　the　formation　of　that　microstructure　during　projectile　impact.　The　adiabatic　shear　bands　were　formed　near　the　crater　wall　and　extend　into　matrix.　It　can　be　found　that　fine　grains　were　formed　within　the　adiabatic　shear　bands　by　dynamic　recrystallization　occurring　during　projectile　impact.　The　micro-cracks　have　been　developed　along　the　adiabatic　shear　bands.　However,　It　is　demonstrated　that　the　formation　of　deformation　bands　are　favorable　for　improving　anti-impact　property　of　Al-Cu-Mn　alloy,　but　adiabatic　shear　bands　are　easily　to　initiate　micro-cracks,　leads　to　the　failure　of　target　material.　(C)　2011　Elsevier　B.V.　All　rights　reserved.