AZ31 Mg alloy samples were extruded by an equal channel angular extrusion (ECAE) process and subsequently annealed to obtain fine-grained material with a low dislocation density. Tensile tests at room temperature exhibited an apparent steady-state deformation region and a large tensile elongation of 47%. The deformed microstructure at an elongation of 2% indicated a substantial cross-slip to nonbasal planes possibly induced by grain-boundary compatibility effects. The nonbasal segments of dislocations were found to consist of 40% of the total dislocation density at a yield anisotropy factor of only 1.1 instead of an expected value of 100 from single-crystal experiments.