Ultrafine-grained microstructure of a QE22 alloy prepared by Friction Stir processing (FSP) is isochronally annealed to study the thermal stability and grain growth kinetics. The FSPed microstructure of QE22 alloy is thermally stable under ultrafine-grained regime up to 300 °C and the activation energy required for grain growth is found to be exceptionally high as compared to conventional ultrafine-grained magnesium alloys. The high thermal stability and activation energy of the FSPed QE22 alloy is due to Zener pinning effect from thermally stable eutectic Mg12Nd and fine precipitates Mg12Nd2Ag and solute drag effect from segregation of Neodymium (Nd) solute atoms at grain boundaries. © 2016 Elsevier B.V.