Inspection of pre-polished surfaces of Mg–3Al–1Zn hot-rolled plate following 5% uniaxial compression revealed a distinctive heterogeneous deformation pattern. The pattern differed depending on the face examined. The greater share of the strain was born by regions characterized by grains considerably finer than the average. These regions displayed a favourable alignment for basal slip and were probably formed by shear banding during previous rolling. It is clear that local orientation softening leads to inhomogeneous deformation despite local grain size-hardening and twin activation.