Increase usage of magnesium components in the portable electronics industries has propelled considerable research interest on the development of magnesium forging. There have been some studies done in the area of sheet metal forming and forging of axis-symmetrical parts of magnesium alloys but there are very little work done on the plane strain backward extrusion of magnesium alloy. This paper deals with the analysis of plane strain extrusion of magnesium alloy, AZ31, using numerical modeling at different extrusion conditions of temperatures and friction coefficients. A commercially available finite element package, ANSYS/LSDYNA, was used in the finite element analysis. FE simulated results, material deformation, punch force and stress/strain distributions, were compared with actual experimental data. From the numerical analysis, a decrease in forging temperature from 300degreesC to 250degreesC will lead to a moderate increase in forming resistance. The forming resistance will increase by about 2 to 3 times more when the forging temperature was further reduced to 150degreesC. The studies found that increase in friction coefficient has a greater impact in increasing punch force during low temperature forming. There is strong evidence of dynamic recrystallisation at 300degreesC. Production of fine grains is prominent at the region of large shear and slip.