Abstract: AZ31 magnesium alloy weld in good shape was produced by friction stir welding. Metallographic microscope was adopted to observe the microstructure of the weld, and by transmission electron microscopy (TEM) and X ray energy spectrum instrument, grain shape and the second phase precipated at the grain boundry were observed and analyzed. The results showed that magnesium alloy friction stir welding could produce weld of dense tissue. According to the characteristics of the grain microstructure, the weld area could be divided into the weld nugget zone, thermo-mechanically affected zone and the heat affected zone. The onion rings of weld nugget zone presented lamellar structure, and the quantity and size of strengthening phases in the grain boundary decreased. The boundary of the advancing side in thermo mechanically affected zone and the weld nugget zone was obvious, and the grains were elongated strips. The boundary of the retreating side and the nugget zone was relatively unobvious, and the grain deformation was smaller. The advancing side in the heat affected zone was relatively narrow, and the microstructural change was small, almost the same with that of the parent material. The retreating side of the heat affected zone was wide, and the grain size had grown larger. The differences in the retreating side and advancing side were caused by the migration and accumulation of metal in the process of friction stir welding.