Abstract The correlation between the microstructure and tensile behavior of powder metallurgy ZK60 alloys fabricated at different extrusion temperatures (T=200°C–350°C) was investigated. At T≥300°C, full dynamic recrystallization (DRX) occurred throughout the material, accompanied by the dynamic precipitation of fine MgZn2 particles. The tensile deformation behavior at room temperature depended on the grain size and the precipitate phase. Particle-dislocation interaction and associated strain hardening were observed in relatively coarse-grained Mg alloys (average grain size d>1μm), but were almost absent in the ultrafine-grained (UFG) materials mainly due to dynamic recovery. The powder metallurgy ZK60 alloys with d=0.4μm show a good balance of ultrahigh yield strength (402.1MPa) and high ductility (14.4%).