A deformation technique of the equal channel helix angular extrusion (ECHE) was proposed. Extrusion process, temperature field, metal flow, microstructure and mechanical properties of ECHE AZ31 magnesium alloy were investigated by Deform-3D FEM, OM, SEM, TEM and tensile experiments. The results show that metal flow is symmetrical and there is no disfigurement at the temperature of 380 oC and extrusion rate of 3 mm·s-1. The ECHE could evidently refine the grains of the alloy. The mechanism of grain refinement is grain fragmentation and dynamic recrystallization. The mean grain size after extrusion is 3~5 μm and the material is deformed homogeneously. The mechanical properties are greatly improved. The tensile strength, yield strength and elongation of the sample are increased from 209 MPa, 104 MPa and 11% to 286 MPa, 165 MPa and 26.4%, respectively. The tensile fracture combines the dimple fracture with quasi-cleavage fracture.