The deformation behavior of friction stir processed magnesium alloy with average grain size ranging from 25 μm to 240 nm was studied. An evaluation of critical grain size for transition of deformation mode from twinning to slip was carried out by employing tensile and compressive tests. The role of critical grain size in transition of deformation behavior from strain hardening to softening was established. Inhomogeneous yielding was observed during tensile test of ultrafine-grained magnesium alloy below the critical grain size. © 2012 Elsevier B.V.