Microstructural development and dynamic recrystallization behaviour of the recently developed high strength magnesium alloy ZC71 (7% Zn, 1% Cu, 0.5% Mn) and the composite ZC71-12%SiCp (where SiCp denotes particulate SIG) have been studied. The grain size and growth in the die-cast, extruded (80%), solution-heat-treated and aged conditions were examined by transmission and scanning electron microscopy and light microscopy. In the alloy, dynamic recrystallization took place during extrusion. In the composite the SIC particles provided more nucleation sites for the new recrystallized grains. After extrusion, during the solution and ageing heat treatment at 440 degrees C and 200 degrees C respectively, no apparent effect of the eutectic stringers on grain growth was observed in either the alloy or the composite. Grain growth occurred in the alloy, but in the composite this was inhibited by the SIC particles. This is mainly because several boundaries were surrounded by the particles and thus grain growth was limited. Despite the very fine grain size, the grain structure is stable in the composite during long-term treatment at 200 OC.