Ingots of AZ31 alloys were prepared for the present study. The ingots were hot rolled to 0.5 mm thickness. In order to develop rolled magnesium alloy sheet having excellent plastic formability, the authors attempted the grain refinement and randomization of the rolling texture of the alloy by means of surface modification utilizing wet-type shot blast (wet blast) and subsequent annealing. Then the microstructural observations including texture analysis and tensile tests were carried out. Furthermore, the bendability and stretch formability were investigated. After wet blast and subsequent annealing at 573K for 1h, the region of 50 mu m depth from the sheet surface that experienced deformation by wet blast is recrystallized, and fine and equiaxed grains are generated. Although rolling texture remained in the central part of the sheet, the recrystallized grains near the surface of such specimens have random crystallographic orientation. The tensile strengths of both rolled and wet-blasted specimens are almost the same but the elongation of the latter increases due to grain refinement and randomization of crystallographic orientation. Such a microstructural feature realizes bending with the radius of 1 mm without cracks and wrinkles and leads to an increase in limiting stretching depth by 1.5 similar to 2 mm.