The　microstructure　evolution　of　the　as-rolled　Mg-3Zn-0.5Er　alloy　(wt.%)　has　been　investigated.　The　results　showed　that　the　phase　constituents　of　the　sheet　were　composed　of　the　α-Mg　solid　solution　and　the　I-phase　(Icosahedral　quasicrystalline).　The　microstructure　of　sheets　transformed　from　the　deformation　twinning　into　dynamic　recrystallization　(DRX)　grains.　Furthermore,　the　deformation　twinning　appeared　again　in　the　dynamic　recrystallization　grains　during　further　hot　rolling.　It　indicated　that　the　twining　was　the　main　deformation　mechanism　and　marginal　dynamic　recrystallization　(DRX)　occurred　in　the　deformation　twins　at　low　strains.　As　the　reduction　reached　39.6%,　the　twin　dynamic　recrystallization　(TDRX)　regions　cluster　and　widen　by　consumption　of　the　initial　deformation　twins,　then　formed　shear　bands.　After　the　reduction　exceeded　66.3%,　the　microstructures　of　sheets　were　composed　of　equiaxed　DRXed　grains　and　fine　twins.　Moreover,　compared　with　the　RD-ND　plane,　the　RD-TD　plane　had　a　smaller　average　grain　size,　ultimately　reached　15.8μm,　which　also　led　to　a　higher　average　value　of　the　hardness.　©　2017　Trans　Tech　Publications,　Switzerland.