Nanoindentation was performed in selected grain orientations close to [. 112-0] and [. 101-0] in magnesium alloy Mg-3Al-1Zn. The atomic force microscopy (AFM) and electron backscatter diffraction (EBSD) were used to examine the nanoindentation imprint. Two critical events, yielding and pop-in were observed in the depth-load curves. Slip trace analysis suggests that basal slip is responsible for yielding. The following pop-in events at higher loads are associated with the appearance {. 101-2} twins on the surface. The critical resolved shear stress (CRSS) was estimated to be in the range of 220-400. MPa for the initiation of basal slip.