Precipitation behavior in severely plastically deformed Mg–3.4at%Zn was studied by ageing treatment at 348 and 423K. Microstructural observations reveal two kinds of precipitates: one from the dynamic precipitation during high-pressure torsion processing and the other from the ageing treatment. Precipitates formed from annealing treatment are observed inside of grains after 4h of annealing at 423K, while they were not observed at 348K. Effect of precipitation hardening is balanced by the grain growth and formation of precipitates free zones at ageing temperature of 423K, resulting in the absence of age-hardening effect in ultra-fine grained MgZn prepared by severe plastic deformation.