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An Mg-0.41Dy (wt%) alloy was successfully processed by high-pressure tension (HPT) through 5 turns at room temperature. The evolution of the recrystallization microstructure and the texture and mechanical properties of the deformed alloy were investigated after annealing at 200 and 400 °C for 1 h using Electron Backscatter Diffraction (EBSD) and Vickers measurements. The recrystallization temperature and activation energy were evaluated using Differential Scanning Calorimetry (DSC). Processing by HPT led to significant grain refinement with an average grain size of ~0.5 ± 0.1 μm which increased to ~1.2 ± 0.8 μm after annealing at 400 °C. This slow increase in grain size at a high temperature demonstrates a good thermal stability of the microstructure. The alloy exhibited two main fiber textures after HPT processing: firstly a typical basal fiber (φ 1 = 0–360°, Φ = 0° and φ 2 = 0–60°) and secondly a fiber localized at φ 1 = 180°, Φ = 60° and φ 2 = 0–90°. These textures were retained after annealing at 400 °C. There was no change in the microhardness value after annealing at 200 °C (41 ± 1 Hv) and only a minor decrease after annealing at 400 °C (38.4 ± 0.5 Hv). The DSC results showed that the temperature associated with the recrystallization process increased with increasing heating rate and the activation energy for recrystallization was measured as ~25 kJ mol−1. • Processing by HPT up 5 turns produces a significant refinement in grain size. • The recrystallization temperature was measured in the range of ~120–200 °C. • The activation energy for recrystallization was ~25 kJ mol−1. • The texture was retained after subsequent annealing at 400 °C for 1 h. • A good thermal stability was demonstrated after annealing at 400 °C for 1 h. [ABSTRACT FROM AUTHOR]