The effect of the second-phase Al3Sc particles on dynamic restoration process during hot deformation of an Al-Mg alloy was studied. The observed fluctuations of the stress-strain curves and grain growth during high temperature deformation strongly suggested that dynamic recrystallization occurred in the Al-3%Mg-0.2%Sc alloy containing coherent Al3Sc particles with the average size, 0.2mum in diameter, much smaller than the critical size of second phase particles beyond which dynamic recrystallization was expected to occur. TEM observation revealed the areas of high dislocation density at the immediate vicinity of the particles in high temperature deformed conditions. The effects of the Al3Sc precipitates on the formation of the high temperature deformed microstructure were discussed.