Friction stir welding achieves the well in solid phase by locally introducing frictional heating and plastic flow arising from rotation of the welling tool, which results in changes in the local microstructure of magnesium alloy. The purpose in the paper is to study the microstructures of friction stir welled AZ31 magnesium alloy. Residual microstructures,including dynamic re-crystallization zone and nugget structures have been systematically investigated utilizing optical microscopy (OM), scanning electric microscopy (SEM),transmission electron microscopy (TEM) with energy dispersive spectroscopy (EDS), X-ray diffraction (XRD) and micro-hardness. AZ31 magnesium alloy has been successfully friction stir welded and exhibits the variations of microstructure including dynamically recrystaUized,equaxied grains in the well nugget. Residual hardness in the nugget was found slightly lower than the parent but not too obvious.