The present paper describes the development of ultra-fine grains on the surface of AZ31 alloys caused by hydrogenation and dehydrogenation treatment, so-called HDDR process. Upon hydrogenation process, disproportionation reaction occurred in forming of MgH2, Mg0.42Al0.58, and Al phases. In the following desorption process, the three phases were re-solved into the AZ31 alloy. As a result of the HDDR phenomena, the grain size of AZ31 alloy powders was reduced down to about 100 nm after the heat treatment at 350 degreesC under a hydrogen pressure of 7 MPa for 24 h. The grain size tended to be increased with increasing process temperatures. In addition, the HDDR process was also applied to AZ31 alloy plates. By the HDDR process at 450 degreesC, the grain size was reduced to less than 500 nm, where hydrogenated layer thickness was limited to be in the range of about 20 gm from the surface. The Vickers hardness of AZ31 alloy plates was increased from 51.9 to 59.4 by HDDR-treatment.