The microstructure and mechanical properties of AZ80 alloy were investigated during thermal processing. The samples of 4 mm in thickness machined from cast ingot were compressed at 300 ℃ with a thickness reduction of 75% and cooled in the water to room temperature. Then ageing(T5) and solution+ageing (T6) treatments were employed respectively. The results show that mechanical properties are significantly improved after thermal processing than those of as-cast AZ80 alloy due to grain refinement and discontinuous precipitates. The heat treatment has significant influence on microstructural evolution for sample formed at moderate temperature. Microstructural evaluation indicates that the β-phase increases because of sufficient solution and the alloy is strengthened evidently.