The　repeated　plastic　working　deformation(RPW)　process　can　reduce　grain　size　of　a　Mg　alloy　from　50-100　um　to　10-500　nm,　but　the　mechanism　responsible　for　it　has　not　been　clear　up　to　now.　In　the　present　paper,　the　effect　of　RPW　deformation　process　on　the　grain　size　of　Mg-5Gd-1Er　alloy　has　been　studied,　and　a　series　microstructural　evaluations　were　performed　to　investigate　the　possible　mechanism　for　RPW　deformation　by　using　transmission　electron　microscopy.　Although　there　are　no　twinning　or　fibrous　microstructures,　the　dynamic　recrystallization,　which　usually　occurs　in　high　stacking　fault　energy　metals,　has　been　found　in　the　alloy　deformed　by　RPW　process.　The　results　indicated　that　the　vacancy　diffusion　played　an　important　role　in　this　kind　of　dynamic　recrystallization.　According　to　the　evolution　of　microstructure,　a　mechanism　was　proposed　to　explain　the　dynamic　recrystallization　for　RPW　deformation　process.